USD/JPY continues to struggle below 105.00 handle

Despite of a dramatic turnaround in the investor sentiment, the USD/JPY pair is seen struggling to gain traction and has now dropped back below 104.50 level. 

Global risk-on rally failed to assist the pair to break-through Friday's trading range and the pair stalled its recovery move near 104.85 level. Broad selling pressure surrounding the greenback could be the key factor restricting any swift recovery for the pair.

Moving ahead, Monday's empty US economic calendar seems unlikely to trigger any big moves for the pair. Traders, however, would be keenly awaiting for Tuesday's release of the latest BoJ monetary policy meeting minutes that would provide in-depth insights on the economic conditions that influenced the central bank to leave its monetary policy unchanged in June.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the 1 hour chart shows that the 100 SMA continues heading lower well above the current level, whilst the technical indicators have turned lower, and entered negative territory, supporting some further declines towards the 104.15 level, in where the  pair will finally fill its weekly opening gap. In the 4 hours chart,  the Momentum indicator has turned sharply lower after entering positive territory, whilst the RSI indicator maintains its bearish slope around 41, supporting the shorter term outlook."

"Support levels: 103.90 103.55 103.20
Resistance levels: 104.60 105.00 105.50"