USD/JPY clings to gains near 1-week tops, bulls await a sustained break through 110.00 mark

   •  The USD builds on Friday’s rebound and continued driving the pair higher on the first trading day.
   •  Positive US bond yields provided an additional boost, through cautious mood seemed to cap gains.

The USD/JPY pair held steady near one-week tops, albeit now seemed struggling to make it through the key 110.00 psychological mark. 

The US Dollar built on Friday's modest rebound, supported by strong headline NFP print and upbeat US ISM manufacturing PMI, and was seen as one of the key factors driving the pair higher for the second consecutive session on Monday. 

The up-move was further supported by a follow-through pickup in the US Treasury bond yields, though a mildly negative tone around the European equities underpinned the Japanese Yen's safe-haven demand and kept a lid on any runaway rally.

Adding to this, a more dovish message by the Fed further collaborated towards holding gains under check and hence, remarks by a slew of influential FOMC member this week will play an important role in determining the pair's next leg of a directional move. 

In the meantime, the USD price dynamics and the broader market risk sentiment might continue to act as key determinants of the pair's intraday momentum amid absent relevant market moving economic releases on Monday.

Technical outlook

Valeria Bednarik, FXStreet's own American Chief Analyst writes: “The pair is technically bullish, although the 110.00 level is a tough bone to break without the proper catalyst. Nevertheless, readings in the 4 hours chart support an upward extension, as the pair has advanced above its 200 SMA for the first time since mid-December, while technical indicators continue heading north, nearing overbought territory.” 

“The pair already tested late January the 110.00 figure, retreating from the level, which means stops above it can be large. If triggered, the pair can extend its advance up to the 110.45 price zone, while beyond this last an approach to the 111.00 price zone is likely,” she added further.