USD/JPY advances to daily highs near 113.20 as dollar gathers strength

• US Dollar Index recovers above 97 in NA session.
• The pair extends its rebound above the 113 mark.
• US markets are closed in honour of former President George H.W. Bush.

After losing nearly 100 pips on Tuesday, the USD/JPY pair staged a technical recovery on Wednesday and rose above the 113 mark during the NA trading hours. As of writing, the pair was trading at 113.20, adding 0.36% on a daily basis.

Despite a lack of macroeconomic data releases from the United States, the greenback gathered strength in the last hour. A sharp upsurge witnessed in the USD/CAD pair following the BoC's monetary policy statement, which adopted a very cautious tone regarding the near-term outlook, seems to be the primary driver of the dollar's recent strength. The US Dollar Index, which tracks the greenback against a basket of six major currencies, was last up 0.2% on the day at 97.15.

On Thursday, Japan's Ministry of Finance will release foreign bond investment data. Later in the day, the US economic docket will feature ADP private sector employment change, third quarter nonfarm productivity, third quarter unit labour costs, and October trade balance figures.

In the remainder of the day, the greenback is likely to stay as the sole driver of the pair's price action as both bond markets and stocks market will be closed in honour of former President George H. W. Bush.

Technical levels to consider

The initial resistance for the pair aligns at 113.60 (Dec. 4 high) ahead of 114 (Nov. 28 high) and 114.20 (Nov. 12 high). On the downside, supports could be seen at 112.90 (50-DMA), 112.35 (100-DMA) and 112 (psychological level).