• Yen recedes as trade tensions take a breather.
  • Thin data and a lack of developments leaves the USD/JPY primed for a shakeup.

The USD/JPY is trading just beneath 111.50 for Tuesday after bounding higher in the early day's action.

Asia session traders pushed the Yen down as risk sentiment recovered after markets grew tired of being pushed down by trade war angst, and the Dollar-Yen pairing is bumping higher heading into European markets.

US and Japanese economic data are both light in the upcoming sessions, but markets will be bracing for tariff headlines in the coming days ahead of Friday's US CPI reading.

USD/JPY levels to watch

With little headlines or economic developments on the radar today, Tuesday's bullish push could have been premature as major pairs remain biased towards the middle, as noted by FXStreet's own Valeria Bednarik: "the technical picture is neutral, as the pair has been ranging pretty much since mid-August. The short-term picture is neutral-to-bullish, as, in the 4 hours chart, the price continues moving around horizontal and parallel 100 and 200 SMA, both indicating the absence of a clear directional trend, while technical indicators entered positive ground, the Momentum heading north but the RSI now flat around 51. The pair would need to clear the resistance area between 111.40 and 111.50 to be able to extend its gains up to 112.14, August high and a key breakout point."

Support levels: 110.90 110.65 110.25   

Resistance levels: 111.45 111.80 112.15

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