USD/JPY prints new 8-month tops at 113.90, then retreats

The USD/JPY pair finally broke its overnight consolidation phase to the upside and clinched fresh multi-month highs just shy of 114 handle, before quickly receding gains last minutes.

USD/JPY faces rejection near daily R1

Broad based US dollar strength continues to remain the key theme so far this week, especially after hawkish FOMC minutes and better-than expected US durable goods data, which provided extra legs to the renewed uptick in the USD/JPY pair.

However, the sudden bid-wave behind the major lost leg just few pips short of 114 levels as the US dollar ran into strong resistance against its major peers, with the USD index having facing rejection just shy of 102  handle.

Moreover, the benchmark Japanese index, the Nikkei 225, also moved away from session highs, which also partly contributed to the retreat in the major from multi-month highs.

Meanwhile, markets shrugged-off unimpressive Japanese CPI figures, as the sentiment behind the US dollar continue to drive markets. Focus now shifts towards the US macro news due later on Friday, including US goods trade balance and flash services PMI.

USD/JPY Technical levels to watch 

In terms of technicals , the immediate resistance is located at 113.90 (multi-month high). A break above the last, the major could test 114.33 (daily R2) and 114.56 (March high) beyond the last. While to the downside, the immediate support is seen at 113.22 (daily low) next at 113.09 (daily pivot) and below that at 112.34 (Nov 24 low).

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