The USD/JPY pair bounced off few pips from session low near mid-113.00s, but continued trading with bearish bias despite of strong US economic data.
Currently hovering around 113.80-85 region, the greenback selling pressure abated during early NA session in wake of upbeat US economic releases, which added on to recent slew of robust macro data and a provided much needed respite for the US Dollar bulls.
Data released on Thursday showed, weekly jobless claims rose by 5,000 to 239K, still better-than consensus estimates pointing to a rise to 245K. In addition to this, the Philly Fed manufacturing index indicated seventh straight month of improving conditions and soared to 43.3 in February, marking the highest level since early 1984. Furthermore, building permits and housing starts also clocked better-than-expected readings and collaborated towards limiting further downslide for the major, at least for the time being.
The recovery, however, has been tepid amid prevalent risk-off mood, which tends to benefit the Japanese Yen’s safe-haven appeal. Hence, broader market risk sentiment would be an important determinant of the pair’s movement during NY trading session on Thursday.
Omkar Godbole, Analyst and Editor at FXStreet notes, “he rejection at the 50-DMA on Wednesday, followed by a drop to 114.00 levels despite upbeat US data suggests the pair could breach the rising trend line support seen on the above chart around 113.90. The RSI has already breached the rising trend line.”
“A breach of 113.90 could yield a sell-off in 113.25 - 113.08 (50-MA on 4-hour). On the higher side only a daily close above 115.00 (50-DMA) would signal continuation of the rally from the recent low of 111.61.”