USD/JPY holds comfortably above 114.00 handle, Yellen speech awaited
• Reverses overnight sharp retracement slide from nearly 8-month tops.
• Subdued US bond yields and cautious environment capping gains.
• Breakthrough 114.40-45 zone need to confirm bullish outlook.
The USD/JPY pair trimmed some of its early strong gains but has still managed to hold its neck comfortably above the 114.00 handle.
After yesterday's sharp pull-back from the highest level since mid-March, the pair regained some fresh traction and was being supported by persistent greenback buying interest, with the US Dollar Index reclaiming the key 95.00 handle.
However, a subdued action around the US Treasury bond yields failed to provide any additional boost. Adding to this, a sudden change in the sentiment around European equity markets extended some support to the Japanese Yen's safe-haven appeal and collaborated towards keeping a lid on the pair's up-move.
With bulls still struggling to decisively break through the 114.40-45 heavy supply zone, investors will closely monitor progress over the Republicans proposed tax bill before positioning for any additional near-term appreciating move for the major.
• USD/JPY dwindling odds for further upside – UOB
Today's US economic docket features the release of JOLTS Job Openings data, which might provide some impetus ahead of the Fed Chair Janet Yellen's scheduled speech later during the NY trading session.
Technical levels to watch
Immediate strong hurdle remains near mid-114.00s, which if conquered might now lift the pair beyond 114.75 level (Monday's swing high) towards reclaiming the key 115.00 psychological mark.
On the flip side, weakness below the 114.00 handle might continue to find support near the 113.70-65 region, which if broken could extend the corrective slide towards 113.25 intermediate support en-route the 113.00 mark.