USD/JPY holds above 114.00 mark after unemployment claims

The USD/JPY pair remained well offered for the fourth consecutive session, albeit has managed to hold its neck above 114.00 handle after being slammed to a 5-week low earlier during the day.

Data released just a while ago showed weekly jobless claims for the week ended Jan. 6 rose to 247K  from previous week's 235K. Expectations were pointing to a rise to 255K and hence, seems to have provided some immediate respite to the bulls.

Meanwhile, comments from St. Louis Fed President James Bullard that there's no reason to dramatically move rates now and we can afford to be patient with inflation below goal, failed to reinforce market expectation of faster Fed rate-hike action and failed to contribute towards any additional recovery. 

Moreover, the US Dollar slump, driven by plummeting US treasury bond yields in wake of disappointment from President-elect Donald Trump's first formal news conference, extended through early NA session on Thursday and collaborated to the pair's slide to the lowest level since December 8.

Treasury bond yields would now continue driving the pair as investors now look forward to gain some fresh insight on the central bank's monetary policy outlook for 2017 from comments from various Fed officials, which includes - Philadelphia Federal Reserve Bank President Patrick Harker, Atlanta Fed President Dennis Lockhart and Fed Chair Janet Yellen.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, "The bearish price RSI divergence on the daily chart, followed by a repeated failure to hold above 116.04 (double top neckline) coupled with the bearish break in the daily RSI below 50.00 suggests the spot could breach 114.55 (23.6% fib of 101.19-118.66) levels and slide to 50-DMA level of 113.00"

He further writes, "On the higher side, only a daily close back above 116.04 would signal bullish invalidation."