USD/JPY consolidates below 111.00 handle ahead of ADP report

The USD/JPY pair struggled to build on early strong up-move and remained capped below the 111.00 handle through the mid-European trading session.

Having posted a session high level of 110.93, the pair retreated few pips and now seems to have entered a consolidation phase around the 110.75-80 region as traders seemed reluctant to place aggressive bets ahead of the release of ADP report on the US private sector employment. 

With the US Dollar failing to build on previous session's tepid recovery move from 15-month lows, diminishing demand for traditional safe-haven assets, despite the prevalent cautious environment, remained supportive of the strong bid tone surrounding the major. 

Moreover, a modest pickup in the US Treasury bond yields further drove flows away from the Japanese currency and helped the pair to hold with strong gains, just below weekly tops touched earlier during the Asian session.

Today's key focus would be on the US private sector employment details, which would be looked upon for some immediate respite for the buck and might eventually provide some fresh bullish impetus to the major.

   •  USD/JPY is stabilizing in the 110.27/109.75 band – Commerzbank

Technical levels to watch

Any meaningful retracement back below 110.65-60 immediate support would turn the pair vulnerable to head back towards retesting the key 110.00 psychological mark before eventually dropping to 109.60-55 region. On the upside, bulls would be eyeing for a sustained up-move beyond the 111.00 handle, above which a fresh bout of short-covering should accelerate the momentum towards 111.25-30 intermediate resistance en-route its next important hurdle near the 111.90-112.00 region.