USD/JPY recovers to upper half of daily range, trades near 108

• The US 10-year Treasury bond yield turns south in NA session.
• Wall Street stays calm ahead of key Q2 earnings figures.
• US Dollar Index extends daily recovery toward 97.

After spending the first half of the day near the 107.80 handle, the USD/JPY pair has gained traction in the last hour and posted small gains. Nevertheless, the pair remains stuck in its daily range and was last seen trading a little below the 108 mark.

The lack of significant macroeconomic drivers today seems to be forcing the pair to fluctuate in a very tight range. After rising sharply last week, the US Treasury bond yields have gone into a consolidation phase on Monday and is not allowing the strongly-correlated pair to gather momentum. At the moment, the 10-year T-bond yield is down 0.4% on the day.

On the other hand, the US Dollar Index, which closed the previous week in the negative territory pressured by the FOMC Chairman Powell's cautious remarks that reaffirmed a rate cut in July in the eyes of investors, is making a technical correction on Monday. Additionally, the NY Fed Manufacturing Index rose to 4.3 in July from -8.6 in June to support the greenback's recovery. As of writing, the DXY was 96.92, adding 0.21% on a daily basis.

There won't be any macroeconomic data releases from Japan on Tuesday. Later in the day, the U.S. economic docket will feature retail sales data.

Technical levels to watch for