USD/JPY bulls now eyeing a decisive breakthrough 107.00 handle

   •  Easing trade-war fears weigh on JPY’s safe-haven appeal.
   •  A modest USD rebound provides an additional boost.

The USD/JPY pair built on overnight sharp rebound, with bulls now eyeing a decisive break-through the 107.00 handle.

The pair on Wednesday rallied from an intraday low level of 105.99 and was being supported by a strong recovery in the US equity markets. The spill-over effect witness in the Asian markets continued weighing on the Japanese Yen's safe-haven appeal and helped the pair to build on the recovery move.

This coupled with a modest US Dollar rebound provided an additional boost and remained supportive of the pair's steady climb through the Asian session on Thursday. The greenback made a comeback after the US President Donald Trump's economic adviser Larry Kudlow said that the administration was in negotiation with China, and not engaged in a trade war, which eased fears about a full-blown US-China trade dispute. 

It would now be interesting to see if bulls are able to maintain their dominant position or the pair struggles to move past the 107.00 handle as investors now start repositioning for Friday's keenly watched US monthly jobs report (NFP). 

In the meantime, today's release of the usual weekly initial jobless claims data, which although is unlikely to be a game changer, would be looked upon for some short-term trading impetus.

Technical outlook

“The pair looks set to close above 107.00 - the inverse head-and-shoulders neckline... a move that would open up upside towards 109.37,” writes Omkar Godbole, Analyst and Editor at FXStreet. 

He further added: “A close below 105.66 (April 2 low) would violate "higher lows" pattern and would allow re-test of the recent low of 104.63 (March 26 low).”