USD/JPY is regaining the upside traction in the European session, as risk sentiment rebounds on firmer European equities while the US S&P 500 futures turn positive on the day.

The positive shift in the market mood has reduced the demand for safe havens such as the US government bonds and the US Dollar, lifting the US Treasury bond yields across the curve. The benchmark 10-year US Treasury bond yields are up 0.71% on the day at 3.456%.

Earlier in Asian trading, the major faced rejection just shy of the 133.00 mark and turned south to test the 135.50 psychological level. The pair was last seen trading at 132.91, adding 0.40% on the day.

The further upside in the USD/JPY pair could depend on Wall Street performance, as the US Dollar is resuming its downside below 102.00 against its major rivals. On the data docket, the United States will feature the JOLTS Job Openings and the Factory Orders data in the North American session.

From a short-term technical perspective, USD/JPY is running into a critical resistance of the horizontal 50-Daily Moving Average (DMA) at 133.00.

The 14-day Relative Strength Index (RSI) is edging lower but holds well above the midline, suggesting that the upside momentum is likely to remain intact.

However, a potential 21 DMA and 50 DMA bearish crossover could warrant caution for USD/JPY buyers.

Therefore, bulls need acceptance above the 50 DMA barrier on a daily closing basis to break from the recent trading range and target the 133.50 static resistance.

On the flip side, a sustained move below the 132.50 demand area will threaten intermittent support near 132.20. Further south, the 132.00 round figure will be the last line of defense for bulls.