USD/JPY spikes to 106.00 neighborhood post-ADP report

   •  ADP report shows 200K+ new private sector jobs for the fifth straight month.
   •  JPY further weighed down by a goodish rebound in European equity markets.

The USD/JPY pair extended its recovery move from intraday lows and is now looking to move back above the 106.00 handle post-ADP report.

The pair caught some fresh bids after the latest ADP National Employment Report showed that the US private sector employers added 235K new jobs during the month of February. The headline figure, marking 200K+ jobs gains for the fifth month in a row, was better than 195K expected and provided a minor lift to the major.

Adding to this, a slight improvement in investors’ appetite for riskier assets, as depicted by a goodish rebound across European equity markets, was seen denting the Japanese Yen's safe-haven assets and further collaborated to the pair's ongoing rebound.

It, however, remains to be seen if the pair is able to build on the momentum or the up-move is once again utilized as an opportunity to initiate fresh short positions amid growing concerns about a possible global trade war. 

Technical levels to watch

Momentum beyond the 106.00 mark is likely to confront resistance near the 106.20-25 region, above which a fresh bout of short-covering could lift the pair further towards its next supply zone near mid-106.00s.

On the flip side, 105.75 level, followed by mid-105.00s now seems to protect the immediate downside, which if broken might turn the pair vulnerable to retest multi-month lows, near 105.25 level, before heading towards the key 105.00 psychological mark.