USD/JPY builds on to strong recovery, soars to 102.60

The Japanese Yen continues to sell-off across the board, with the USD/JPY pair now extending its momentum further beyond 102.00 mark to a fresh session high above 102.50 level. 

Friday's strong headline NFP print continues to extend support to the greenback on Monday. Meanwhile, the Japanese currency came under intense selling pressure after Japanese PM Abe's confirmation to announce additional stimulus, as early as tomorrow, in order to combat low inflation and support fragile economic growth. 

Adding to this, risk-on rally across global equity markets is also denting the safe-haven appeal of the Japanese currency and contributing to the ongoing sharp recovery for the USD/JPY major. 

The combination of events forced investors to cut their USD bearish bets that triggered a bout of short-covering rally, boosting the pair over 200-pips from session low level near 100.50 region. After today's sharp up-surge, the pair has virtually erased all of its losses recorded in the previous week and now seems all set to extend its upward trajectory. 

Technical levels to watch

On a sustained strength above 102.50-55 resistance, the pair seems all set to extend its recovery trend towards post-Brexit recovery swing highs resistance near 103.40. The momentum could further get extended towards its previous strong support, now turned resistance near 103.90 level. Meanwhile on the downside, the pair now seems to find immediate support near 102.00 handle. Any further weakness below this immediate support might be short-lived and is likely to be bought into around 101.50-40 support area.