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  • US Dollar Index stays below 97.50 on quiet day.
  • Wall Street looks to open the day flat.
  • 10-year US T-bond yield rises more than 1%.

The USD/JPY pair, which lost nearly 100 pips last week, started the week in a calm manner and started to climb higher in the European session. As of writing, the pair was trading at 111.25, adding 0.1% on a daily basis.

After posting losses in every trading day of the previous week, the 10-year US T-bond yield gained traction on Monday and helped the pair reverse its course. At the moment, the 10-year yield is up 1.02% on the day. On the other hand, following Friday’s NFP-led sell-off, the US Dollar Index is struggling to find direction on Monday amid a lack of significant drivers. Although the T-bond yield upsurge is helping the greenback, for the time being, markets are likely to react to the retail sales data from the U.S. that is seen contracting by 0.1% in January.

In the meantime, the S&P 500 Futures is up 0.08% on the day, suggesting that Wall Street is likely to start day flat.  

There won’t be any macroeconomic data releases from Japan on Tuesday and the pair is likely to continue to fluctuate in its trading range at least until tomorrow’s inflation report from the U.S.

Technical levels to consider

The pair could face the initial resistance at 111.50 (200-DMA) ahead of 112.15 (Mar. 5 high) and 112.60 (Dec. 20 high). On the downside, supports are located at 111/110.95 (psychological level/100-DMA), 110.65 (Feb. 28 low) and 110.20 (50-DMA).