USD/JPY consolidates in a range, below 113.00 handle

   •  A modest USD rebound extends some support at lower levels.
   •  US-China trade tensions/cautious mood capped the uptick. 

The USD/JPY pair struggled for a firm direction and remained confined in a narrow trading band below the 113.00 handle at the start of a new trading week. 

The pair was seen consolidating Friday's sharp fall to two-week lows, triggered by the Fed Vice Chairman Richard Clarida's dovish comments, saying that interest rates are nearing a neutral rate, and seems to have found some decent support near the 112.60 region. 

A modest US Dollar was seen as one of the key factors lending some support, albeit conflicting signals on the prospects for a breakthrough in the US-China trade dispute led to a subdued/range-bound price action through the Asian session on Monday

Friday's optimistic trade-related comments by the US President Donald Trump, saying that the US may not have to impose more tariffs on Chinese goods, quickly faded after leaders failed to agree on a communique at an APEC meeting in Papua New Guinea over the weekend.

Meanwhile, the prevalent cautious mood, reinforced by a mildly softer tone around the US Treasury bond yields underpinned the Japanese Yen's safe-haven status and further collaborated towards keeping a lid on any meaningful up-move, at least for the time being.

Moving ahead, there isn't any major market-moving economic data due for release on Monday and hence, the broader market risk-sentiment might continue to act as an exclusive driver of the pair's momentum ahead of the BoJ Governor Haruhiko Kuroda's scheduled speech on Tuesday.

Technical outlook

Valeria Bednarik, FXStreet's own American Chief Analyst writes: “The daily chart shows that technical indicators turned south, maintaining strong downward vertical slopes, the Momentum still above its mid-line but the RSI already at 46. In the same chart, the 100 DMA maintains a mild bullish slope, currently at 112.00, providing a strong dynamic support that if broken, will anticipate a steeper decline.”

“In the 4 hours chart, the bearish case is stronger, as the pair finished below all of its moving averages, while technical indicators stand at fresh monthly lows, the Momentum extending its decline and the RSI partially losing its downward strength at around 30,” she added further.