USD/JPY retreats after hitting fresh session peak near 115.00 mark

The USD/JPY pair extended its recovery move and jumped to a fresh daily tops during early European session, before quickly retreating few pips to currently trade around 114.75-80 region.

Market players seem to have digested Friday's dismal US Q4 GDP print that showed economy growth slowed to 1.9% annualized pace during the last quarter of 2016. Moreover, a fresh leg of up-surge in the US treasury bond yields further helped the key US Dollar Index to reversed early losses led by the US President Donald Trump's travel ban order, which raised concerns over his protectionist stance.

Meanwhile, disappointing Japanese retail sales data weighed on the Japanese Yen and contributing to the pair’s ongoing recovery move. However, weaker sentiment around European equity markets is lending some support to the Yen’s safe-haven appeal and capped the pair’s up-move just below 50-day SMA, at-least for the time being. 

Today's economic data includes the Fed's preferred inflation gauge - Core PCE Price Index, which will be followed by the release of Personal Income / Spending and Pending Home Sales, and would be looked upon for some trading impetus during NA session. This week's major focus would remain on BoJ decision on Tuesday, the FOMC meeting on Wednesday and January’s NFP data on Friday, which would help investors determine the pair’s next leg of directional move.

Technical levels to watch

A convincing move above 50-day SMA hurdle near 114.95-115.00 region is likely to accelerate the up-move towards 115.35-40 resistance area ahead of 115.60 level (Jan. 19 high). On the downside, renewed weakness below 114.50 level, leading to a subsequent break below session low support near 114.25 region, would turn the pair vulnerable to break below 114.00 handle and head towards testing its next support near 113.75 horizontal level.