USD/JPY challenges 113.00 ahead of US data

The greenback is extending its bearish tone on Friday, now prompting USD/JPY to approach the critical support at the 113.00 handle.

USD/JPY looks to data, US yields retreat

USD stays on the defensive during the second half of the week, navigating the area of 2-week lows and slightly bouncing off yesterday’s pullback to the 112.90/85 band.

Today’s weak note from yields in the US money markets add to the bearishness surrounding the buck despite some rebound following the FOMC-induced retracement. Anyway, yields of the 10-year reference manage well to hold on to levels above the key 2.50% mark.

The greenback in the meantime remains unable to pick up pace when tracked by the US Dollar Index, which briefly pierced the psychological 100.00 support, as market sentiment following the FOMC disappointment stays depressed.

In the US data space, Industrial Production, Manufacturing Production, Capacity Utilization and March’s advanced reading of Consumer Sentiment gauged by the Reuters/Michigan Index are all due later.

USD/JPY levels to consider

As of writing the pair is losing 0.17% at 113.12 and a breakdown of 112.89 (low Mar.16) would aim for 111.67 (low Feb.28) and finally 111.57 (low Feb.7). On the upside, the next hurdle aligns at 113.69 (20-day sma) ahead of 114.03 (55-day sma) and then 114.91 (high Mar.15).