USD/JPY challenges highs around 103.20

The greenback has recovered part of the ground lost on Monday, now lifting USD/JPY to the 103.20/30 band, or daily highs.

USD/JPY supported at 102.80

After bottoming out in the 102.80 region during early trade, the pair has regained buying interest and moved back above 103.00 the figure despite trading conditions remain flat following today’s inactivity in Japanese and US markets.

Spot is recovering part of Friday’s significant pullback following US Payrolls (156K) and coming down from last week’s multi-day tops above 104.00 the figure, levels last seen in early September.

USD has regained attention today, as market participants have already digested Payrolls figures and the probability of a rate hike by the Fed at the December meeting has climbed to 60% according to Fed Funds futures prices assessed by CME Group.

Furthermore, following the latest CFTC report, speculators have increased their JPY longs to the highest level since mid-April, while net longs have eased a tad during the week ended on October 4, albeit they still remain in multi-month highs

USD/JPY levels to consider

As of writing the pair is up 0.33% at 103.25 and a breakout of 104.17 (high Oct.7) would open the door to 104.33 (high Sep.2) and then 107.48 (high Jul.21). On the other hand, the immediate support lines up at 101.87 (20-day sma) followed by 100.07 (low Sep.22) and finally 99.53 (low Aug.16).