USD/JPY holding its gains to 109.50 just ahead of the US CPI data

An attempted move above 109.50 for the USD/JPY pair fizzled near 109.65, dragging the pair back to 109.50 level just before the release of the US CPI and housing market data.

Looking at a slightly broader picture, the pair already seems to have signaled a bullish break-out of its recent trading range and hence, seems more likely to extend its recovery trend. The bullish bias, however, gets negated should the pair drop back below 20-day SMA support near 108.80 level.

Investors now keenly await the release of US CPI data for April, which although might not change the outlook of a Fed rate-hike in June but is likely to trigger some immediate tradable moves in the greenback.

Technical levels to watch

On the immediate upside, bulls would be aiming to reclaim 110.00 psychological mark and head towards testing 50-day SMA, currently near 110.28-30 area.

Conversely, weakness back below 109.00 handle (108.80 20-day SMA support) is likely to attract fresh offers, dragging the pair back towards the lower end of the recent trading range support near 108.35-30 zone.