USD/JPY refreshes multi-month tops on stronger US GDP

   •  US Q3 GDP growth comes in at 3.0%, vs. 2.5% expected.
   •  USD clings to gains post-data.
   •  Muted US bond yields capping up-move near July monthly tops. 

The USD/JPY pair reversed the early European session dip to sub-114.00 level and refreshed multi-month tops after the US GDP print, albeit quickly retreated few pips thereafter.

The pair caught some fresh bids after the advance US GDP estimate showed a strong economic growth during the third quarter of 2017, coming in at 3.0% annualized pace as compared to 2.5% expected. The figures provided an additional boost to the already strong US Dollar and lift the pair to its highest level since July 11.

However, subdued action around the US Treasury bond yields, despite firming expectations for a December Fed rate hike action, kept a lid on any further up-move, with the pair quickly retreating around 20-25 pips from session tops. 

Meanwhile, the prevalent risk-on environment across global equity markets did little to lend any support to the Japanese Yen's safe-haven appeal. Hence, any dips are likely to be bought into, with a possible move beyond July monthly highs resistance, near mid-114.00s, seems a distinct possibility.

Technical levels to watch

A follow-through buying interest beyond 114.50 level now seems to pave way for extension of the pair's upward trajectory towards reclaiming the key 115.00 psychological mark. Conversely, any profit taking slide might now find immediate support near the 114.00 handle, below which the pair could correct back to 113.45-40 strong horizontal support.