Having refreshed monthly lows near 112.25 region, the USD/JPY pair has managed to recover previous session's lost ground and seems to have snapped 5-days of losing streak.
Currently trading around 112.75-80 band, the pair was seen attempting a fresh move towards reclaiming the 113.00 handle amid slight improvement in investors' risk appetite. Macron’s win in the first French Presidential debate triggered a fresh wave of risk-on trade and dented demand for traditional safe-haven assets, including the Japanese Yen.
Meanwhile, persistent greenback selling pressure, against the backdrop of less hawkish Fed outlook, has failed to provide any fresh bullish impetus. In fact, the key US Dollar Index has now weakened back below the key 100.00 psychological mark and seems to be only factor collaborating towards restricting further up-move and capping the pair below 100-day SMA hurdle near 113.00 handle.
Later during the day, traders are likely to take cues from New York Fed President William Dudley's speech ahead of the US economic docket, with broader market risk sentiment also playing a key role in determining the pair's movement on Tuesday.
Technical levels to watch
Momentum above 112.90 (yesterday's high) could get extended towards 100-day SMA resistance near 113.10 region, above which the pair is likely to accelerate the up-move towards 50-day SMA hurdle near 113.60 region.
On the downside, retracement back below mid-112.00s might now drag the pair towards 112.00 round figure mark before the pair eventually drops to yearly lows support near 111.65-60 region.