USD/JPY holding steady near 109, taking a breather

• The Dollar is holding steady after climbing against the Yen.
• A thin schedule for the economic calendar leaves the markets at the whim of current trends and shifts in market sentiment.

The USD/JPY is holding near the high side in Tokyo trading, testing 108.80, but the pair has halted its upward march for now.

USD/JPY analysis: bulls taking over

The US Dollar is recovering across the broad FX market, bolstered by rising US Treasury yields where the 10-year Treasury is edging closer to the 3 percent key level, and the USD is running up against the JPY as markets remain relatively risk-on after several weeks of tensions over the Middle East and the US-China trade spat. Trade tensions remain the global risk factor, but for now the USD/JPY is climbing into three-month highs.

Tuesday is a quiet showing for the USD and the JPY, with Japan's Leading Economic Index at 05:00 GMT, which is expected to hold steady at the previous reading of 105.8, while the US session sees a smattering of data, most notably being the monthly figures for the Housing Price Index at 13:00 GMT, forecast at 0.5 percent versus the previous reading of 0.8.

USD/JPY Levels to watch

The bullish turnaround in the pair on the Dailies means a new trend could be priced in from here, and as FXStreet's own Valeria Bednarik noted earlier, "the fact that the pair broke its range to the upside is quite suggestive, and while a downward correction is not yet out of the table, the trend seems to have found its way, as long as the greenback doesn't fall out of market's favor again. Technically, the 4 hours chart shows that indicators accelerated north, maintaining their upward strength despite being in extreme overbought territory. In the same chart, moving averages gain upward traction far below the current level, becoming irrelevant as short-term supports."

Support levels: 108.10 107.70 107.30

Resistance levels: 108.70 109.05 109.40