USD/JPY consolidating post-Fed up-surge to multi-month highs

The USD/JPY pair was seen consolidating post-FOMC up-surge to fresh 10-month highs and was confined in a narrow trading range with mild negative bias around 118.00 handle. 

Bulls took a breather on Friday as market digested hawkish Fed statement that sparked a sharp greenback rally across the board, lifting the overall US Dollar Index to its highest levels in more than 13 years. Meanwhile, a mild retracement in Treasury bond yields also seem to be contributing towards a mild profit-taking dip from 10-1/2 month high level touched in the previous session.  In fact, the 10-year US Treasury note yield has turned back below 2.6% after hitting the highest level since September 2014 on Thursday. 

A relatively lighter US economic docket, featuring building permits and housing starts, is unlikely to provide any fresh impetus and the pair might extend pre-weekend corrective pause. Nevertheless, the pair is sill headed for its sixth consecutive week of gains.

Technical levels to watch

On a sustained weakness below 118.00 handle, the corrective slide is likely to get extended towards 117.50 intermediate support en-route 117.00 round figure mark. On the upside, renewed strength above 118.50 level now seems to lift the pair beyond Thursday's multi-month high resistance near 118.65 level, towards testing 119.00 round figure mark.