USD/JPY confined in a narrow range just below 114.0 handle

The USD/JPY pair struggled for a firm direction and has been confined within a 15-20 pips narrow trading band around the 114.00 handle amid subdued trading action on Tuesday.

Growing prospects for an eventual Fed rate-hike move during the next monetary policy meeting on March 14-15 continues to underpin the US Dollar. Meanwhile, heightened geopolitical risks, following the North Korea episode on Monday, was seen lending support to the Japanese Yen's safe-haven appeal, eventually leading to a range-bounce price action since early Asian session on Tuesday.

The major, however, seems to have gained some traction and is now heading back to the top end of daily trading range amid a modest recovery in the US treasury bond yields and slight improvement in investor risk appetite.  

With an empty US economic docket, the pair remains at the mercy of broader market risk-sentiment ahead of the final Japanese GDP print during early Asian session on Wednesday. Investors, however, would await the release of keenly watched NFP data on Friday before committing to the pair's near-term directional move. 

Technical levels to watch

Momentum above the 114.00 handle is likely to confront strong resistance at 50-day SMA near 114.15-20 region, above which the pair seems all set to retest 114.75 resistance (Friday's high) before aiming towards reclaiming the 115.00 psychological mark.

On the downside, weakness below 113.80-75 immediate support is likely to accelerate the slide towards 113.20 horizontal support ahead of the next major support near 112.80-75 region.