USD/JPY attempts recovery above 109.50, will it sustain?

The USD/JPY pair is seen making minor-recovery attempts from five-month lows struck earlier at 109.35, and now looks to take on the recovery beyond 109.50 levels.

The bulls seem rescued by fresh buying interest seen around the greenback across the board, with the US politics once again a driver. As Reuters reports, Republican state Treasurer Ron Estes won a 'special election' in Kansas for a House seat vacated by CIA Director Mike Pompeo.

Moreover, a minor-recovery in the treasury yields as risk-aversion cools-off a bit, also helps support the bounce in the major. However, it remains to be seen if the spot manages to sustain the recovery as geo-political tensions surrounding North Korea and Syria continue to boost the safe-haven flows for the yen.

Data-wise, the US docket offers the second-tier data release in the import prices and Federal Budget balance, as focus shifts towards Thursday’s PPI and consumer sentiment data for fresh incentives.

USD/JPY Technical levels to watch             

The major finds immediate resistance at 109.88 (200-DMA). A break above the last, the major could test 110/110.06 (round number/ daily pivot) and 110.47/68 (5 & 10-DMA) beyond the last. While to the downside, the immediate support is seen at 109.35 (5-month low) next at 109 (zero figure) and below that at 108.67 (classic S2/ Fib S3).