USD/JPY reverses Monday’s losses, comfortable above 106.00 handle

   •  A modest USD rebound helps build on early recovery move.
   •  JPY further weighed down by a slight improvement in risk appetite.

The USD/JPY pair built on its steady recovery move from an intraday low level of 105.69 and is now headed back towards previous session's swing high. 

Against the backdrop of a goodish pickup in the US Treasury bond yields, a modest US Dollar rebound provided an additional boost and helped the pair to extend the up-move further beyond the 106.00 handle.

Meanwhile, investors now seemed to look beyond trade war and some initial signs of stability returning back to global equity markets further dented the Japanese Yen's safe-haven appeal. A tepid recovery in the European equity markets, along with indications of a positive opening across the US bourses pointed to a slight improvement in investors' risk appetite and remained supportive of the pair's bid tone. 

It would now be interesting to see if bulls are able to maintain their dominant position or the up-move once again runs out of steam as investors now start repositioning for this week's important US macroeconomic releases, including the keenly watched monthly jobs report (NFP).

Technical levels to watch

Immediate resistance is pegged near the 106.55-60 region, above which the pair is likely to make an attempt towards reclaiming the 107.00 handle. On the flip side, the 106.00-105.90 area now seems to protect the immediate downside, which if broken could accelerate the fall towards 105.40-35 support.