USD/JPY bounces-off session low, still weaker below 104.00 handle

The USD/JPY pair's reversal from multi-week highs, led by weaker Chinese data, seems to have found support near 103.50 region and the pair has now bounced-off session lows to currently trade around 103.80 level. 

During early Asian session on Thursday, the pair extended near-term bullish momentum and jumped to 104.64, the highest level since July 29, on increasing expectations of a December Fed rate-hike action following Wednesday's release of minutes from the Federal Reserve's latest monetary policy meeting.

The pair, however, lost its upside momentum as disappointing Chinese trade balance resurfaced concerns of economic slowdown in the world's second largest economy and boosted the safe-haven appeal of the Japanese Yen. Chinese trade balance fell sharply in September and came-in to show surplus of $41.989 billion as compared to $52.05 billion in August and $53.00 billion expected.

Later during the NA trading session, US weekly jobless claims data might provide some impetus, while the broader market risk sentiment would be a key driver for the pair's momentum during European session.

Technical levels to watch

Momentum above 104.00 handle now seems to confront resistance near 104.15-20 region above which the pair is likely to head back towards 104.50-60 resistance. A sustained move above 104.50 resistance would pave way for a fresh leg of appreciating move for the pair in the near-term.

On the flip side, weakness below 103.50 level is likely to find support at 100-day SMA near 103.35 region, which if broken seems to drag the pair back below 103.00 handle towards testing 102.90-85 support area.