USD/JPY recovers back to 114.00 mark

The USD/JPY pair maintained its bearish bias for the sixth consecutive session and dropped to its lowest level since Dec. 8. The pair, however, has managed to bounce off around 35-pips from session low and is currently hovering around 114.00 handle.

Renewed concerns of a ‘hard Brexit’ triggered a fresh wave of risk-aversion and benefitting the Japanese Yen's safe-haven demand. This coupled with uncertainty surrounding the incoming President-elect Donald Trump administration's fiscal stimulus policies has been prompting investors to continue with long-dollar unwinding trade on Monday. 

With the US markets closed in observance of Martin Luther King Day, the broader market risk sentiment and the US Dollar price-dynamics would remain key drivers for the pair's movement on Monday.

Technical levels to watch

Weakness below session low support near 113.65 level is likely to find support at 50-day SMA near 113.50 region, which if broken decisively is likely to open room for continuation of the pair's near-term downward trajecotry initially towards 113.00 round figure mark and eventually towards its next major support near 112.00 handle, with some intermediate support near 112.50 area.

On the flip side, any further recovery might now confront resistance near 114.50 region above which the pair seems all set to head back towards reclaiming 115.00 handle. A follow through buying interest back above 115.00 psychological mark might now negate any near-term bearish bias and lift the pair immediately towards 115.35 intermediate resistance, en-route 116.00 round figure mark.