The Fed has forecast it will raise rates two more times in 2018, having already tightened policy twice this year. Given that, short-end treasuries outperformed following the soft housing data. Equities were mostly up in Europe and the US, while preventing the pair from easing further. Japan's trade balance for June missed expectations , The USDJPY has retraced from the probe above the 113 handle as BoJ reduced the long-end purchases to cause some noise. The potential for an upside breakout is still very much intact.
The USD/JPY is flashing in red due to overbought conditions and broke under the 113 level trading at 112.80. The pair is still showing strength for the third week of the month by trading above its pivot point at 112.30 level, however a break under this level will be a turning point for the pair and could push it lower. On the other hand, a pullback above the 113.20 yesterday high will lead towards new highs for the year.
Support: 111.40 110.65
Resistance: 113.65 114.30