USD/JPY retreats from two-week peaks, slides farther below 114.00 mark

The USD/JPY pair reversed majority of dismal Japanese GDP-data led gains to two-week highs and has now retreated around 50-pips from session peak near 114.15 region.

Currently trading around 113.65 level, spot gained fresh traction on Monday as markets took a sigh of relief after Abe-Trump meeting over the weekend produced no major pronouncement on currency policies. Moreover, the prevalent risk-on mood prompted investors to dump the safe-haven Japanese Yen. 

Meanwhile, disappointing Japanese Q4 prelim GDP report, coming-in at 0.2% q-o-q, coupled with a downward revision to previous quarter's growth rate, also weighed on the Yen and assisted the major to clear 114.00 handle.

The pair, however, lost its upside momentum as traders seemed to take some profits off the table after witnessing a sharp upsurge of around 250pips from 2-1/2 month touched last week.

In absence of any major economic releases on Monday, the pair remains at the mercy of broader market risk sentiment and the US Dollar price-dynamics ahead of this week’s key event risk - the Fed Chair Janet Yellen's testimony before the Senate Banking Committee on Tuesday.

Technical levels to watch

A follow through retracement below 113.50-45 immediate support is likely to get extended towards 113.20-15 region below which the pair is likely to head back towards 112.75-70 horizontal support. On the flip side, a sustained move back above 114.00 handle, leading to a subsequent break through session peak resistance near 114.15 region, is likely to accelerate the up-move towards 114.55 horizontal resistance, en-route 50-day SMA hurdle near 115.00 psychological mark.