USD/JPY erases weekly losses, jumps to 3-day high near mid-110.00s

The USD/JPY pair reversed UK exit polls-led downward spike to session lows around 109.75 region and touched a three-day high level near mid-110.00s during early European session.

The pair recovered from lows as the US Dollar regained traction on the back of a sharp sell-off in the British Pound led by the outcome of the UK snap general election. Moreover, investors looked past the UK political turmoil and hence, stability in equity markets further denting the Japanese Yen's safe-haven appeal.

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Traders also shrugged off subdued action surrounding the US treasury bond yields, with persistent greenback buying interest acting as a sole driver of the pair's up-move back closer to weekly tops. 

With an empty US economic docket, any news related to political developments in the UK and broader market risk-sentiment would remain key determinants of the pair's momentum through Friday's trading session.

Technical levels to watch

Momentum above mid-110.00s is likely to get extended towards weekly highs resistance near 110.75 level, above which a fresh bout of short-covering could lift the pair beyond the 111.00 handle towards its next major hurdle near 111.30-35 region.

On the flip side, the key 110.00 psychological mark now seems to protect immediate downside, which if broken would turn the pair vulnerable to head back towards 109.40 important horizontal support ahead of 1-1/2 month lows support near 109.10 level.