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    USD/JPY bounces-off 106.50 as Nikkei recovers losses Dhwani Mehta

    The USD/JPY pair moved-off lows, although remains heavily offered as the extended slide in the Nikkei continues to boost the demand for the yen. USD/JPY reverts to 107? The JPY bulls stay in charge as risk-off remains at full steam on poor Chinese CPI data, keeping the USD/JPY pair deep in the red below 107 handle. At the time of writing, USD/JPY trades -0.30% at 106.64. While the Nikkei sinks -1.20% versus -1.40% earlier.However, a minor pullback in the Japanese stocks is seen providing the much-needed respite to the bulls, and therefore, allowing a tepid bounce from 106.53 lows.Meanwhile, the major will closely monitor the sentiment around the equities and oil markets in absence of relevant macro news until the NA session, when the weekly jobless claims will be published. USD/JPY Technical levels to watch In terms of technicals , the immediate resistance is located at 107 (5-DMA). A break above the last, the major could test 107.31/57 (1h 100-SMA/ daily R2). While to the downside, the immediate support is seen at 106.50 (psychological levels) and below that at 106.35 (Monthly Low). 

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