USD/JPY trims tepid recovery gains, back around mid-110.00s

The USD/JPY pair was seen struggling to build on early recovery move and retreated over 25-pips from session tops.

The pair is currently hovering around over two-week lows touched in the aftermath of Friday's disappointing headline NFP print. Weaker-than-expected May jobs report, accompanied with a downward revision of previous month's reading, now seems to have dampened expectations for an aggressive Fed rate tightening cycle. 

This coupled with the prevalent cautious environment, in wake of the latest terrorist attack in the UK over the weekend, was seen supporting the Japanese Yen's safe-haven appeal and has failed to assist the pair to register any meaningful recovery.

Market participants, however, remain convinced that the Fed would eventually move towards raising rates on June 14 and hence, a modest recovery in the US treasury bond yields has helped the pair, at least for the time being, to hold with minor gains around mid-110.00s. 

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Later during the day, the US economic data - revised nonfarm productivity, ISM non-manufacturing PMI and factory orders data, would now be looked upon for some fresh trading impetus. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes, "50-DMA and 100-DMA have topped out. The 200-DMA is seen offering support around 110.19 levels. The Friday’s bearish outside day candle engulfed the activity seen in the previous four trading days. Friday’s close was also the weakest since April 25. The price action adds credence to the bearish RSI and MACD and indicates potential for a break below 110.00 levels. A daily close below 110.00 would open doors for a re-test of 108.13 (recent low)."