USD/JPY has been in a three-day sell-off driven lower by risk aversion flows, but today the pair has managed to stage a comeback and is closing well above the 106.00 level. The markets appear to have stabilized after yet another wave of Trump rants on twitter and traders will now likely focus on the real business at hand as a series of key US economic reports are about to be released this week.

First on deck will be the ADP data due tomorrow at 8:15 EST and then the ISM Non- Manufacturing. Unless both reports widely miss their mark, they should prove positive for the pair confirming that US economy continues to grow steadily and that the Fed will maintain its rate hike policy for the foreseeable future.

Technically, USD/JPY has made inverse head and shoulders bottom, which tends to be a very robust bottoming pattern and looks ready to make another run at the 107.00 figure.

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