USD/JPY flirting with lows, bulls trying to defend 106.00 handle

   •  Struggles to build on overnight recovery move from multi-month lows.
   •  Subdued USD demand/weaker bond yields prompting some fresh selling. 
   •  Traders largely ignore the prevalent risk-on mood. 

The USD/JPY pair met with some fresh supply near mid-106.00s, 3-day tops, and has now slipped into negative territory, eroding part of previous session's recovery move.

A subdued US Dollar price-action, primarily led by a mildly weaker tone around the US Treasury bond yields, failed to assist the pair to build on overnight goodish rebound from closer to 16-month tops. 

A fresh wave of global risk-on trade, amid easing fears of a possible global trade war and as depicted by strong gains across equity markets, did little to weigh on the Japanese Yen's safe-haven appeal and stall the pair's retracement slide through the early European session. 

It would now be interesting to see if the pair is able to find some support at lower levels or bears regain their dominant position as investors now look forward to this week's important event risks - BOJ monetary policy decision and the keenly watched US non-farm payrolls data for some fresh directional impetus.

Technical levels to watch

A follow-through weakness is likely to get extended towards 105.70 horizontal support, below which the pair is likely to drop back to 105.35-25 area en-route the key 105.00 psychological mark. 

On the upside, 106.45-50 zone now seems to have emerged as an immediate resistance, which if cleared might trigger a short-covering bounce towards the 107.00 handle ahead of 107.30-35 supply zone.