USD/JPY fails to sustain above 110.00, focus shifts to US data

The USD/JPY pair faded its early European session spike beyond the key 110.00 psychological mark and quickly retreated around 30-pips from session tops.

The pair touched a two-week high level of 110.17 but failed to sustain early strength, despite a follow through US Dollar up-move. Even a strong recovery witnessed in global equity markets, which tends to weigh on the Japanese Yen's safe-haven appeal, did little to provide any fresh bullish impetus to the major. 

A modest pullback in the US Treasury bond yields from higher levels, coupled with today's upbeat Japanese retail sales data seems to be key factors failing to assist the pair to extend its up-move. 

Moving ahead, today's US economic docket, featuring the release of ADP report and revised GDP print, would now influence the greenback dynamics and eventually help traders to grab some short-term trading opportunities.

Technical levels to watch

Immediate support is pegged near 109.75 level, which is followed by a horizontal support near 109.50 area. A clear break below the mentioned supports would turn the pair vulnerable to head back towards retesting the 109.00 handle. 

On the upside, momentum back above the 110.00 handle might continue to confront some fresh supply near the 110.20-25 region, above which a fresh bout of short-covering could lift the pair closer to the 111.00 mark with some intermediate resistance near 110.65 level.