USD/JPY recovers lost ground, refreshes session tops near 113.40

The USD/JPY pair managed to recover all of its early losses to sub-113.00 level and has now jumped to fresh session tops near 113.35-40 region.

With the US Dollar lacking any strong follow through buying interest, in absence of any hawkish surprise from Wednesday's FOMC meeting minutes, the recent price action clearly seems to suggest strong buying interest on every dip below the 113.00 handle.

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Meanwhile, a modest recovery in the US Treasury bond yields, coupled with a stable opening in European equity markets indicated fading risk-aversion trade. Hence, diminishing safe-haven demand was also seen weighing on the Japanese Yen and further collaborated to the pair's up-move over the past hour or so.

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From a technical perspective, yesterday's upswing marked a breakthrough a short-term descending trend-line resistance and hence, it would now be interesting to see if the pair is able to build on the up-move amid growing geopolitical tension between the US and N. Korea.

Today's US economic docket features the release of ADP report, trade balance data and ISM non-manufacturing PMI print, which would now be looked upon for some fresh impetus later during the NA session. 

Technical levels to watch

Momentum above 113.69 level (yesterday's swing high) is likely to confront resistance near 113.80-85 region, above which the pair seems more likely to surpass the 114.00 handle and head towards testing its next hurdle near 114.35-40 region (May monthly highs).

On the flip side, 112.90-80 region remains an immediate strong support to defend, which if broken could drag the pair back towards 112.30 horizontal support en-route 112.00 handle and 100-day SMA support near 111.80-75 region.