USD/JPY struggling to build on up-move further beyond 109.00 mark

The USD/JPY pair struggled to build on previous session's recovery move from multi-month lows, albeit has managed to hold in positive territory for the second consecutive session around the 109.00 handle. 

Overnight strong gains in the US equity markets pointed to improving investors' risk-appetite and prompted some profit taking off the safe-haven Japanese Yen. This coupled with a modest rebound in the US treasury bond yields further underpinned the US Dollar demand and helped the pair to stage a sharp bounce from the lowest level since mid-Nov. 

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The pair, however, lacked follow through momentum as investors remained worried over escalating tensions between the U.S. and North Korea. Moreover, against the backdrop of last week's jawboning by the US President Donald Trump, and a slew of disappointing US macro data, the pair might continue to face some strong selling pressure on any meaningful recovery attempts.

Next of relevance would the release of US housing market data and industrial production numbers, due later during the NA session. 

Technical levels to watch

Momentum above 109.20 area (session top) is likely to confront resistance near 109.40 level, above which a bout of short-covering could lift the pair back toward the key 110.00 psychological mark.

On the downside, retracement back below 108.90 level is likely to get extended towards 108.60-55 horizontal support, which if broken should turn the pair vulnerable to break below multi-week low level and head towards testing the 108.00 handle.