The US dollar dropped against the Japanese yen in late Asian trade on Monday, paring much of early gains on the day.

At around 83.7 by 10:40 GMT, off day's high of 82.97, USD/JPY is now testing support near its 38.2 percent Fibonacci retracement from early November lows.

However, momentum indicators MACD and RSI suggest the pair is in oversold zone and up for a rebound. The first stop up (R1) for USD/JPY could be 83.40 as indicated by 100-day SMA and 23.6 percent Fibonacci and further higher, the pair has resistance near 83.7 (R2), as shown by the 50-day SMA.

The broadly strong greenback is still marginally higher versus the Japanese yen, when compared with its previous close of 82.57, which was a 2-week low for the pair. 

If the Japanese unit gained from Bernanke's comments who hinted at the possibilities of expanding Fed's asset buying program, fresh concerns from Europe, in terms of rising costs for insuring debt investments in more countries, probably helped the greenback remain supported against other majors.

The same fundamental may add fuel to the technical rebound of USD/JPY in the coming hours. Sentix investor confidence indicator for Euro-zone falling below expecatations in December was another supportive for the dollar this morning in Europe.

The Sentix index fell to 9.7 from 14 in November and against market expectations of 11, data released at 9:30 GMT showed.

Key data expected from Japan this week include Wednesday's October trade balance and Thursday's third quarter GDP numbers.

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The US dollar dropped against the Japanese yen in late Asian trade on Monday, paring much of early gains on the day. But tehnicals suggest a rebound for the pair