USD/JPY consolidates daily gains, comfortable above 109.00 handle

   •  A modest retracement in the US bond yields fails to provide any additional boost to the USD.
   •  Risk-on mood weighing on JPY's safe-haven demand and should help limit any downside.

The USD/JPY pair seemed struggling to build on its intraday rebound and was now seen oscillating within 15-20 pips narrow trading range, below mid-109.00s. 

A modest retracement in the US Treasury bond yields failed to assist the US Dollar to extend its bullish trajectory to fresh YTD tops and eventually kept a lid on any further up-move for the major.

Despite a modest pull-back, the pair has managed to hold with modest daily gains and was being supported by fading safe-haven demand amid a strong follow-through up-move in the US equity markets.

It would now be interesting to see if the pair is able to attract any fresh buying or continues with its consolidative price-action as market participants now look forward to speeches by influential FOMC member for some fresh impetus.

Technical outlook

“The recent absence of directional strength has helped the 100 SMA in the 4 hours chart catch up with price, now heading north around 108.55, while a daily ascendant trend line coming from early April stands at 108.50, making of the area a support for the upcoming sessions,” writes Valeria Bednarik, FXStreet own American Chief Analyst.

She further adds: “The 110.00 level is a key psychological resistance level, and the pair would need a strong catalyst to break above it.”