USD/JPY struggling to gain fresh traction, ECB in focus

The USD/JPY pair failed to build on to its recovery move witnessed during early European session and maintained its offered tone within a narrow trading range. 

Currently trading around 113.40-50 band, the pair now seems to be heading back towards the lower end of daily trading range amid some renewed greenback selling pressure emerging in the past couple of hours. Investors seem to be adjusting their positions ahead of key central bank monetary policy meetings, which could trigger a fresh bout of volatility in global financial markets and is seen supporting to the Japanese Yen's safe-haven appeal.

In a short while from now, ECB will announce its monetary policy decision and is expected to extend its QE program beyond the current end date of March 2017. Market participants, however, remain divided over the period of extension and are hence, positioning themselves for any possible adverse reaction.

Meanwhile, December Fed rate-hike decision is nearly fully priced-in and hence, focus would be on the 'dot plots' that would help investor evaluate possibilities, and timing of next Fed rate-hike action, eventually determining the next leg of directional move for the major.

Later during NA session, the usual weekly jobless claims data from the US will be looked upon in order to grab some short-term trading opportunities.

Technical levels to watch

Bulls would be disheartened if the pair fails to hold session low support near 113.15 region below which the pair seems to break through 113.00 round figure mark and head towards testing weekly lows support near 112.85 area. On the upside, sustained momentum above 113.50 level could get extended towards session peak resistance near 113.85 level en-route 114.00 round figure mark.