USD/JPY holds comfortably above 109.00 handle amid notable USD demand

The USD/JPY pair snapped four consecutive days of losing streak and witnessed a smart recovery from sub-109.00 level. 

Currently placed at session tops, around 109.25-30 area, the pair has now reversed all of the previous session's losses back closer to 4-month lows. Today's up-move was being supported by a slight improvement in investors' risk appetite, which was seen weighing on the Japanese Yen's safe-haven appeal. 

This coupled with a modest pickup in the US Dollar demand, despite the ongoing geopolitical concerns further collaborated to the pair's up-move through Asian session on Tuesday.

It, however, remains to be seen if the recovery is backed by any genuine buying or has been solely led by short-covering ahead of this week's key event - Jackson Hole Symposium, where speeches from various central bankers, including the Fed Chair Janet Yellen, would provide a fresh directional impetus for the greenback.

There are no major market moving economic data due for release from the US and hence, broader market risk sentiment and the USD price dynamics would remain key determinants of the pair's movement on Tuesday.

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Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the 4 hours chart supports additional declines ahead, as the price remains well below bearish 100 and 200 SMAs, whilst technical indicators hover within negative territory, although with limited bearish strength. Below 108.59, the low set last week, the pair has room to extend its decline down to 108.12, the mentioned yearly low."