USD/JPY surrenders early strong grains to fresh 3-month tops

   •  Retreats from 3-month tops
   •  Fails to benefit from upbeat US durable goods orders
   •  Downside seem limited amid surging US bond yields

The USD/JPY pair surrendered majority of its early strong gains and has now retreated around 30-35 pips from fresh 3-month tops, back below 114.00 handle.

The greenback struggled to build on upbeat durable goods orders data-led modest recovery move, with the key US Dollar Index testing daily lows near mid-93.00s, and failed to assist the pair to build on its early strength beyond the 114.00 handle. 

The prevalent cautious trading sentiment around equity markets was seen boosting the Japanese Yen's safe-haven appeal and has been one of the key factors weighing on the major. 

However, surging US Treasury bond yields continues to extend some support and might contribute towards limiting any deeper retracement, at least for the time being. 

Next on tap would be the release of new home sales data from the US, which would be looked upon for some fresh bullish impetus for the USD. The key focus, however, would remain on Friday's key macro releases - Japanese inflation figures and advance US GDP print, which would help investors determine the pair's near-term trajectory. 

Technical levels to watch

FXStreet's technical confluence indicator identifies immediate support near 113.80-70 area, below which the corrective slide could get extended towards the 113.00 handle with some intermediate support near 113.30 area.

On the upside, immediate resistance is pegged near the 114.25-30 region, which if cleared could pave way for extension of the pair's upward trajectory towards July monthly highs resistance near mid-114.00s en-route the key 115.00 psychological mark.