USD/JPY eyeing a break through multi-week tops, around 111.70

Having posted a session low near 111.20 region, the USD/JPY pair caught some fresh bids and jumped back closer to multi-week tops resistance near 111.70-80 band.

News that the US congressional negotiations have reached an agreement to keep the government funded and avoid a shutdown extended support to the US Dollar recovery on the first day of new trading week, full of important macro events/releases from the US. 

Adding to this, Friday's upbeat GDP Price Index and Employment Cost Index, offsetting dismal Q1 GDP growth data, further supported additional Fed rate-hike action through 2017 and collaborated to the bid tone surrounding the major. The Federal Reserve is scheduled to announce its latest monetary policy decision on Wednesday and would be followed by the release of keenly watched NFP data on Friday. 

The pair's up-move could also be attributed to a positive sentiment surrounding Asian equity markets, with Japan's Nikkei 225 gaining around 0.5%, which tends to weigh on the Japanese Yen's safe-haven appeal.

With European markets closed in observance of May Day, focus would remain on the US treasury secretary Steven Mnuchin’s speech and the US economic docket for some fresh impetus.

Technical levels to watch

A follow through momentum above 111.70-80 hurdle is likely to get extended beyond the 112.00 handle towards testing 112.20 resistance (March 31 high) ahead of 112.65-70 horizontal resistance. On the downside, weakness below 111.20 level (session low) now seems to drag the pair below the 111.00 handle towards 110.60-55 horizontal support ahead of the key 110.00 psychological mark.