USD/JPY steadies around 111.35 amid lighter trading action

The greenback steadied after initial mild weakness, helped the USD/JPY pair to bounce off few pips from lows to currently trade around 111.30-35 region. 

The pair edged down at the start of a new trading week on news of N. Korea's latest ballistic missile test, which provided a minor boost to the Japanese Yen's safe-haven appeal. With markets now getting used to developments in the Korean peninsula, the pair managed to bounce off lows as investors seemed reluctant to initiate new positions in wake of the Memorial Day holiday in the US.

Meanwhile, the US Dollar continues to find some support from Friday's release that showed the US first quarter GDP growth stood at 1.2% annualized rate, higher from 0.7% reported earlier and was also better-than consensus estimates pointing to an upward revision to 0.9%. 

Investors' focus this week would remain glued to the keenly watched US monthly jobs data (NFP), due for release on Friday, in order to determine the pair's next leg of directional move.

Technical levels to watch

On a sustained momentum above mid-111.00s, the pair is likely to aim towards testing 111.75-80 horizontal resistance before darting towards reclaiming the 112.00 handle.

Meanwhile on the downside, retracement back below 111.15 area (session low) could get extended towards 110.90-85 important horizontal support, below which the pair could accelerate the slide back towards monthly lows support near 110.25 level.