USD/JPY rebounds following risk selloff

• USD/JPY corrects following Asia session decline.
• Market sentiment to drive markets until Powell testimony.

USD/JPY is rebounding heading into the London session, testing just beneath 106.70 as of writing.

Japan's Leading Economic Index and Coincident Index came in mixed, with the Leading Index posting 107.4, lower than the 108.3 forecast, while the Coincident Index came in at 120.2, beating the anticipated 118.3. The mixed reading had a muted initial impact on markets, with the USD/JPY pair continuing to trade above 106.60. 

The yen is receding against the US Dollar after the Tokyo markets kicked off with a quick spat of risk aversion, driving up the Yen and carrying the antipodeans with it while the Greenback slid across the board in early week trading.

US data due in the coming market sessions will see a speech by the Fed's Bullard at 13:00 GMT today, followed by the Chicago Fed's National Activity Index at 13:30, New Homes Sales figures at 15:00, and the Dallas Fed Manufacturing Business Index at 15:30. Markets can expect reduced reactions to macro data Monday, as traders will be turning a keen eye to Fed Charman Jerome Powell's congressional testimony during the Semiannual Monetary Policy Report before the House Financial Services Committee. Chairman Powell is due to give his testimony at 15:00 on Tuesday.

USD/JPY Technicals

The pair is still trading deeply in bearish territory despite the Greenback's recent bounce from 105.55, and H4 candles show USD/JPY currently bouncing off the 61.8 Fibo level. Major support and resistance currently rest at 105.55 and 107.90 respectively, with intraday support at 106.17 and resistance at 107.13.