USD/JPY gains some traction but remains capped below mid-113.00s

The USD/JPY pair struggled to build on overnight recovery move from the 100-day SMA support and remained capped at mid-113.00s.

Currently trading around 113.40 region, the pair has been confined within 20-25 pips narrow trading band in absence of any fresh fundamental trigger. However, a modest follow through recovery in the US treasury bond yields is supporting the greenback and has helped the major to hold above previous session's drop to sub-113.00 level, the lowest level since early March. 

Against the backdrop of perceived less hawkish Fed policy outlook, the prevalent cautious sentiment around equity markets is lending some support to the Japanese Yen's safe-haven appeal, eventually resulting into a subdued, range-bound price action on Friday. 

Moving ahead, traders now focus on the US economic docket - featuring the release of industrial production and Prelim UoM Consumer Sentiment index, for fresh impetus during early NA session. Apart from the US data, news coming out of the G20 meeting and Trump-Merkel meeting might also influence investor sentiment and derive demand for traditional safe-haven assets, including the Japanese Yen.

Technical levels to watch

Bears would be eying for a decisive break below 100-day SMA support near 113.00-112.95 region, below which the pair is likely to accelerate the slide towards 112.20-15 strong support with some intermediate support near 112.40-35 region. 

On the upside, any attempted recovery beyond 113.50-55 immediate resistance is likely to confront resistance near 50-day SMA around 113.80 region, which if cleared has the potential to lift the pair further towards 114.40-45 region.