USD/JPY eases from 6-month tops, just below 113.00 ahead of US data

   •  USD remains supported by Powell’s overnight hawkish comments.
   •  A modest retracement in US bond yields prompts some profit-taking.
   •  Positive equities weigh on JPY and seemed to limit any deeper losses. 

The USD/JPY pair trimmed some of its early gains to fresh six-month tops, albeit has managed to hold with modest daily gains, just below the 113.00 handle.

The US Dollar remained supported by the Fed Chair Jerome Powell's overnight upbeat comments on the US economic outlook and remained supportive of the pair's ongoing positive momentum. 

The pair touched an intraday high level of 113.14 but lacked strong follow-through, with traders now tracking a modest retracement in the US Treasury bond yields. 

However, the prevalent positive trading sentiment around European equity markets weighed on the Japanese Yen's safe-haven appeal and helped limit any deeper corrective slide, at least for the time being.

It would now be interesting to see if bulls are able to maintain their dominant position or opt to take some profits off the table ahead of Powell's second round of testimony, this time before the House Financial Services Committee.

Ahead of the key event, the US housing market data - building permits and housing starts, will also be looked upon to grab some short-term trading opportunities during the early North-American session.

Technical levels to watch

Subsequent up-move is likely to confront resistance near YTD high level of 113.39, above which the pair is likely to aim towards reclaiming the 114.00 handle. On the flip side, any meaningful corrective slide is likely to find support near the 112.55-50 region and is closely followed by weekly lows, around the 112.25-20 zone.