USD/JPY struggling to build on to its recovery beyond 107.00

After arresting Asian session fall to session low level of 106.72, the USD/JPY pair now seems to have stabilized and is trading in a tight range around 107.00 handle. 

Despite of a slight improvement in traders' risk appetite, as depicted by a minor up-tick in European equities, the pair is facing difficulty in extending the recovery decisively beyond 107.00 handle. 

Earlier during the day, Chinese imports data that indicated that the domestic demand in the world's second-largest economy might be recovering, supported a risk-on bounce for the pair. However, the final Japanese Q1 GDP data, showing better-than-initially estimated growth, kept Yen bears on the back-foot. 

With a relatively quiet US economic calendar, the USD/JPY major is likely to take cues from the prevailing risk sentiment in equity markets as investors now gear-up for next week's FOMC meeting.

Technical levels to watch

From current levels, momentum above day's peak resistance near 107.35-40 might continue to confront strong resistance near 107.50 level, beyond which the pair seems to extend its recovery trend beyond 108.00 handle, towards its next major resistance near 108.35-40 zone.

On the flip side, a breakthrough session lows support near 106.75-70 area is likely to accelerate the fall towards retesting last week's low support near 106.40-35 region, ahead of May lows support near 105.55 area.