USD/JPY sits close to the 110.00 handle, but downside pressure are mounting

The USD/JPY pair is trading just shy of the 110.00 handle in early Monday action as Japanese markets come on-line for the new week.

It's a quiet start for the new trading week, and the Bank of Japan's (BoJ) latest Summary of Opinions revealed nothing new for Japan's central bank, and markets are moving sluggishly with a thin economic calendar set up for Monday.

The USD is softly lower against the Yen in recent trading, declining from June's high of 110.90 as trade war concerns and broader market risk aversion sees the Yen maintaining a fairly strong stance across the board.

japan sees the Leading Economic Index (forecast 105.1, prev. 105.6) and the Coincident Index (forecast 115..7, prev. 117.7) at 05:00 GMT, while the upcoming US session will see an updated New Home Sales for the US at 14:00 GMT. New Home Sales are expected to come in at 666 thousand,  a minor uptick from the previous reading of 662 thousand.

USD/JPY levels to watch

The Dollar-Yen pair is facing technical bias towards the downside, and as FXStreet's own Valeria Bednarik noted, "the pair spent much of the last two trading days below the 61.8% retracement of the May's decline, but above the 50% retracement of the same rally, bottoming in the week some pips below this last at 109.54. In the daily chart, the 200 SMA converges with the mentioned 50% retracement, the RSI indicator holds flat around 50 while the Momentum is crossing its mid-line into negative territory, all of which leans the risk toward the downside without confirming it. In the 4 hours chart, the pair presents a neutral-to-bearish stance, as the price is struggling with parallel 100 and 200 SMA, while technical indicators lack directional strength right below their midlines."

Support levels: 109.55 109.20 108.80

Resistance levels: 110.15 110.45 110.90