USD/JPY building on momentum back above 108.00 handle

Having posted a session low at 107.77, the USD/JPY pair recovered majority of early losses and is now building on to its momentum further beyond 108.00 handle.

Currently trading around 108.25-30 region, the pair regained control over 108.00 handle amid improving risk-appetite as depicted by positive sentiment surrounding European equity markets, which is denting the Japanese Yen's safe-haven appeal. 

Meanwhile, increasing bets of an eventual Fed rate-hike action at its December meeting continues to underpin the greenback and hence, Tuesday's retracement from five-month high could be categorized as consolidation or a minor correction from near-term overbought conditions.

Later during NA session, US economic docket, featuring the release of monthly retail sales, Empire State Manufacturing Index and import prices, will be looked upon for short-term trading opportunities.

Technical outlook

Omkar Godbole, Editor and Analyst at FXStreet, notes, "Overall, the spot appears on track to test 109.13 (38.2% of 2015 high - 2016 low). The spot retreated from the weekly 200-MA level of 108.50. Also note, the weekly 200-MA and 50-MA could see a bearish crossover. Watch out for another failure in the range of 108.50-108.80 as that would heighten the odds of a more pronounced technical correction to sub-107.00 levels."