USD/JPY recovers early lost ground, retakes 113.00 mark and beyond

The USD/JPY pair regained some traction during early European session and recovered majority of its early losses to session lows near 112.75 region. 

A recent pick up in the US Treasury bond yields and Monday's upbeat US ISM manufacturing PMI continues to underpin the US Dollar demand and helped the pair to recover back above the 113.00 handle.

With markets looking past the latest news of yet another ballistic missile test by North Korea, some signs of stability in European equity markets further dented the Japanese Yen's safe-haven appeal and collaborated to the pair's move closer to 1-1/2 month highs touched in the previous session. 

It, however, remains to be seen if the pair is able to build on the move and extend its recent bullish momentum amid lingering concerns over the US President Donald Trump’s pro-growth economic policies and subdued trading action in light of the Independence Day holiday in the US. 

Technical levels to watch

Bulls would be eyeing for a sustained break through 113.45-50 immediate hurdle, above which the pair is likely to dart towards 113.75 horizontal resistance ahead of the 114.00 handle.

On the downside, weakness back below the 113.00 mark, leading to a subsequent breakthrough session lows resistance near 112.75-70 region, would turn the pair vulnerable to break below the 112.00 handle and head towards testing 100-day SMA support near 111.80-75 region.