USD/JPY struggling to recover, stuck around 104.70 level

The Japanese Yen maintained its strong bid tone, with the USD/JPY pair failing to register any meaningful recovery and trading just 15-20 pips from session lows.

Cautious sentiment surrounding European equity markets is boosting demand for the traditional safe-haven currency, Yen, ahead of Friday's key event risks namely - BOJ monetary policy decision and US GDP release.

Moreover, markets remained divided over the prospects of further monetary easing by BOJ, which adds to the prevalent uncertainty in the market. Hence, traders will remain focused on Friday's BOJ monetary policy decision, which if fails to deliver might lead to a fresh bout of volatility in the USD/JPY major.

From the US, advance estimate of second quarter GDP growth might provide some respite for the US Dollar bulls. However, a disappointing number would diminish the prospects of an eventual Fed rate-hike in 2016, which would be highly negative for the greenback. 

Trade the US Gross Domestic Product - July 29 GDP Live Coverage

Technical levels to watch

On the immediate downside, break below session low support near 104.50 could accelerate the fall immediately towards weekly lows support near 104.00 handle, below which the pair might turn vulnerable to extend its downward trajectory towards its next major support near 103.00 round figure mark.

On the upside, 105.00 psychological mark now seems to have turned as immediate support, which if conquered decisively should boost the pair towards 105.90-106.00 resistance area.