USD/JPY sits at session tops, comfortable above mid-105.00s

   •  Consolidating recent slump to near 4-month lows. 
   •  A modest USD uptick/fading safe-haven demand supportive.

The USD/JPY pair extended its consolidative price action through the mid-European session and is currently placed near the top end of its daily trading range. 

The pair struggled for a firm directional bias at the start of a new trading week and oscillated within a narrow band around mid-105.00s, closer to Friday's near 4-month lows. A combination of diverging forces failed to provide any fresh impetus and has led to a subdued/range-bound price action.

The US Dollar held on to its defensive tone and was being capped by worries over global trade war, especially after the US President Donald Trump’s announcement for aluminium and steel tariffs.

Meanwhile, a goodish rebound in the European equity markets, pointing to a slight improvement in investors’ appetite for riskier assets, weighed on the Japanese Yen's safe-haven appeal and extended some support, at least for the time being. 

Hence, it would be prudent to wait for a strong follow-through buying interest before confirming that the pair might have bottomed out in the near-term. 

On the economic data front, the US ISM non-manufacturing PMI is due for release during the early NA session, which along with the Fed Governor Randal Quarles' speech might provide some short-term trading opportunities. 

Technical levels to watch

Momentum beyond 105.70 level could assist the pair further towards reclaiming the 106.00 handle en-route its next major hurdle near the 106.55-60 region. On the flip side, 105.40 level might continue to lend immediate support, which if broken could accelerate the fall towards testing the key 105.00 psychological mark.