USD/JPY faces rejection at 101.00 handle, retrace to 100.50

After failing to build on to its weekly bullish gap opening and reclaim 101.00 handle, the USD/JPY pair retraced from session high to currently trade around 100.50-60 band. 

The Fed monetary policy expectations remains the key driver for the greenback and the pair is now seen losing its upside momentum, led by dovish comments by BOJ Governor Kuroda, on skepticism surrounding BoJ monetary policy action at its meeting on September  21. Hence, Kuroda's comments during early Asian session on Tuesday will be closely scrutinized in order to gauge the possibilities of further rate-cut action by the central bank.

This week's key US macro releases, namely - durable goods orders and GDP print followed by the Fed Chair Janet Yellen's speech at the Jackson Hole Symposium, will also be on investors radar during the course of current trading week and would provide fresh cues over central bank's monetary policy outlook that might trigger a fresh bout of volatility in the major.

Technical outlook

Omkar Godbole, Editor and Analyst at FXStreet, notes, "Monthly RSI has turned bearish, while the daily RSI is yet to hit the oversold territory. Thus, corrective moves on the back of oversold daily indicators could be met with fresh offers. On the larger scheme of things, bearish invalidation is seen only in case the spot closes the day above 104.19 (23.6% of 121.69-98.787)."