• Strong USD bullish breakout helps offset risk-off mood and regain some traction.
• Mostly in-line US consumer inflation figures remain supportive of the USD bid tone.
The USD/JPY pair has managed to recover early lost ground to over two-week lows and is now looking to build on its momentum back above the 111.00 handle.
A strong US Dollar bullish breakout seen earlier today helped the pair to catch some fresh bids near the 110.60 support. the mostly in-line US consumer inflation figures remained supportive of the strong bid tone surrounding the greenback and further contributed to the pair's intraday recovery of around 40-45 pips.
The uptick seemed rather unaffected by Turkish crisis, which rattled global financial markets on Friday but did little to drive any safe-haven flows towards the Japanese Yen, with the USD price dynamics turning out to be an exclusive driver of the pair's momentum through the early North-American session.
It, however, remains to be seen if the pair is able to build on the recovery move or remains confined in a narrow trading range, held over the past 48-hours or so.
Technical levels to watch
Any subsequent up-move is likely to confront stiff resistance near the 111.55-60 region, above which the pair is likely to aim towards reclaiming the 112.00 handle. On the flip side, 110.60 area remains an immediate strong support to defend, which if broken now seems to open room for a further near-term downside, towards retesting the key 110.00 psychological mark.