USD/JPY struggles to extend bullish momentum beyond 113.00 handle
• USD trims US tax bill led strong gains.
• Risk-on mood/surging US bond yields lending support.
• Momentum beyond 113.00 needed to confirm bullish bias.
The USD/JPY pair held on to its strong gains through the early European trading session but struggled to gain a strong follow-through traction beyond the 113.00 handle.
With investors looking past the latest optimism over the passage of a long-awaited US tax reform bill, the US Dollar trimmed some of its strong gains led by easing political concerns and failed to provide any fresh bullish impetus to the pair.
Meanwhile, strong gains around the US Treasury bond yields, amid reviving hopes for aggressive Fed monetary policy tightening through 2018, remained supportive of the bid tone surrounding the major.
Moreover, a fresh wave of global risk-on trade on Monday, as depicted by the prevalent bullish sentiment across European equity markets, continued weighing on the Japanese Yen's safe-haven appeal and might now help limit any immediate corrective slide.
With the only scheduled release of factory orders data from today's US economic docket, the pair remains at the mercy of broader market risk sentiment and the USD price-dynamics.
Technical levels to watch
Immediate support is now pegged near the 112.60 region, below which the pair is likely to correct back towards the 112.15-10 support area. On the upside, sustained move beyond the 113.00 handle now seems to pave the way for an extension of the pair's upward trajectory towards 113.45 horizontal resistance en-route 113.70 supply zone.