USD/JPY fails to extend gains

• USD/JPY pulls back from daily highs
• Remains in recovery mode after hitting 4-month low last week

USD/JPY advanced to a high of 109.74 on Thursday, hitting its highest level in 6 days, although it lost momentum afterwards and pulled back slightly.

USD/JPY advanced for second day in a row and moved further away from its 4-month low scored last week at 108.27. However, the pair failed to clear the 109.74 resistance area and it was last trading at the 109.50 area, still 0.3% above its opening price. 

On Wednesday, the Federal Reserve decided to leave policy unchanged but hinted at further rate hikes in the future, giving the USD dollar a boost.

USD/JPY levels to watch

In terms of technical levels, next resistances are seen at 109.74/76 (intraday-high/Jan 26 high) and 110.00 (psychological level) and 110.32 (Jan 24 high). On the other hand, supports could be found at 109.08 (intraday low), 108.59 (Jan 31 low) and 108.40 (Jan 30 low).