FXStreet (Mumbai) - The US dollar manages to recover most losses against its Japanese counterpart in the European morning, sending USD/JPY back to 121 handle. USD/JPY regains hourly 20-SMA at 120.88 Currently, the USD/JPY pair trades almost unchanged at 121, recovering sharply from 120.57 session lows reached in last hours. Fresh bids emerged for the major near 120.60 region and the price jumped-off higher, erasing most losses in a bid to regain 121 barrier. Further, the yen bulls lost complete control on the back of a complete turnaround in risk conditions, with the European stocks staging a solid rebound in early trading. The DAX jumps +2.13% to 10,357, the UK’s FTSE rallies +1.54% to 5,964 while the Euro Stoxx 50 advances +2.40% to 3,206 on short-covering ahead of the Fed decision due tomorrow. In the day ahead, the major will continue to track the sentiment on the global equities while the US CPI data will be closely watched for further USD moves. USD/JPY Technical levels to watch The prices rebound higher and find the immediate resistance at 121.18 (daily high). A break above the last, the major could test 121.48 (1h 100-SMA). While the strong support is seen at 120.57 daily low/ Dec 11 Low) below which 120.35 (Dec 14 Low) would be tested. ------- What will 2016 bring to the Forex traders? Attend our Forex Forecast 2016 - The Panel with Ashraf Laidi, Valeria Bednarik, Boris Schlossberg, Adam Button, Ivan Delgado and Dale Pinkert. Register for the live event on Dec. 18th and get the recording too. ------- For more information, read our latest forex news.