USD/JPY surrenders early gains to near 1-month highs

The USD/JPY pair surrendered its early gains to near one-month highs and is currently placed at the lower end of daily trading range, just below mid-110.00s.

The pair touched an intraday high level of 110.73, highest since mid-August, but failed to extend the up-move amid prevalent cautious environment, which was seen lending some support to the Japanese Yen's safe-haven appeal. 

Investors turned vigilant following the release of weaker fixed asset investment, retail sales and industrial output figures from the World's second largest economy - China. 

   •  China industrial production and retail sales miss estimates

The US Dollar, however, continues to be underpinned by renewed optimism over the US President Donald Trump's pro-growth economic agenda and helped prevent deeper losses, at least for the time being.

Investors' focus on Thursday will remain glued to the much awaited US CPI print, due later during the NA session, which would drive the pair ahead of next week's FOMC meeting.

In the meantime, BoE decision might infuse some volatility and influence safe-haven demand and eventually provide some short-term trading opportunities. 

Technical levels to watch

Immediate support is pegged near 110.25-20 area, below which the pair is likely to break below the key 110.00 psychological mark and aim towards testing its next support near 109.70-60 zone.

On the upside, the 110.70 region now seems to have emerged as immediate resistance, above which the pair is likely to dart towards reclaiming the 111.00 handle.