USD/JPY surges to fresh session tops near 110.80, US retail sales eyed

The Japanese Yen continued losing ground across the board, lifting the USD/JPY pair back within striking distance of over one-month highs touched in the previous session.

The market seems to have digested N. Korea's latest missile launch that flew over Japan into the Pacific Ocean, with the pair rebounding around 120-pips from early Asian session swing lows near mid-109.00s.

Even the prevalent cautious sentiment around European equity markets, which tends to benefit the Japanese Yen's safe-haven appeal, and a subdued US Dollar price action did little to stall the pair's strong up-move to the 110.75-80 region.

Some cross driven JPY weakness, led by a strong post-BoE upsurge in the GBP/JPY cross could be one of the factors driving the major higher through early European session. 

Today's US economic docket features the key monthly retail sales data and should act as one of the key drivers for the pair's movement ahead of next week's FOMC meeting. 

Technical levels to watch

Bulls would be eyeing for a decisive break through the 111.00 handle, above which the pair is likely to dart towards the 112.00 neighborhood with some intermediate resistance near 111.30-35 area.

On the flip side, 110.50-45 zone now seems to protect immediate downside, which if broken could drag the pair back towards the 110.00 psychological mark ahead of 109.70 horizontal support.

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