After a quick drop to 111.30 level in the early NA session, the USD/JPY pair gained traction and edged higher to a fresh session high 111.54. As of writing, the pair is trading at 111.50, up 0.3%, or 33 pips, on the day.

The pair's up-move on Thursday seems to be fueled by the USD recovery. After testing the 93 handle during the Asian session and finding support there, the US Dollar Index finally started to correct the heavy losses witnessed after the FOMC statement yesterday. At the moment, the index is at its session high at 93.68, up 0.4% on the day.

Furthermore, the increasing risk appetite is weighing on the safe-havens like the JPY during the session. After closing the previous day at record highs, major equity indexes in the U.S. started the day higher with the Dow Jones Industrial Average and S&P 500 both gaining nearly 0.3%. With an empty economic calendar in the remainder of the session, the pair's price action could continue to be impacted by the market sentiment.

The economic docket from Japan will be relatively busy on Friday. National and Tokyo CPI data will be followed by June unemployment rate and retail trade. National CPI is expected to remain unchanged at 0.4% on a yearly basis in June and a higher reading could allow the JPY to find demand. Later in the day, the preliminary Q2 GDP growth from the U.S. will be looked upon to see if the economic slowdown was temporary. The market consensus for the annualized Q2 GDP growth to improve to 2.6% from 1.4%.

Technical outlook

With today's upsurge, the pair was able to move above the critical 100-DMA, which now comes as the first technical support at 111.40 ahead of 111 (psychological level) and 110.60 (Jul. 24 low). On the upside, resistances could be seen at 112.00 (psychological level), 112.75 (200-DMA) and 113.55 (Jul. 14 high).

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