USD/JPY inching back closer to 113.00 handle

Having tested 112.30 horizontal support, the USD/JPY pair regained traction and has now jumped to fresh session tops.

Despite a subdued US Dollar price-action, a modest pickup in the US Treasury bond yields helped the pair to attract some fresh buying interest near a 6-day old trading range support and reverse an early dip, led by safe-haven demand on renewed N. Korean fears.

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Meanwhile, the prevalent positive trading sentiment around European equity markets was also seen weighing on the Japanese Yen's safe-haven appeal and further collaborated to the pair's up-move to the 112.70-75 region.

It, however, remains to be seen if the pair is able to build on the up-move or remains confined within its near-term trading range amid absent fundamental drivers, in terms of any major market moving economic releases, and holiday-thinned liquidity conditions.

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Technical levels to watch

Bulls would be eyeing for a move towards reclaiming the 113.00 handle but major upside hurdle remains near the 113.25-30 region, above which the pair is likely to surpass Friday's swing high resistance near mid-113.00s and dart towards 113.85 resistance.  

On the flip side, 112.30 area might continue to protect immediate downside, which if broken would turn the pair vulnerable to slip below the 112.00 handle and test the very important 200-day SMA support near the 111.90 region.