USD/JPY turns flat after US jobless claims data

The USD/JPY pair extended its bounce back from session low near 101.40 region and is now trading nearly unchanged from Wednesday's closing level, around 101.70 region. 

The greenback gained some buying interest after US weekly jobless claims unexpectedly dropped by 4,000 to a two-month low of 259k during the week ended on September 3. The report was better as compared to consensus estimates pointing to a rise to 265k from previous week's 263k and provided a much needed respite for the US Dollar bulls as it reflected the underlying strength in the US labor market. 

However, the recent US economic data points had fell short of expectations and has dimmed expectations of an eventual Fed rate-hike action in September, which continues to weigh on the US Dollar and hence, restricted further upside for the major. 

Moreover, skepticism over BOJ's ability to announce further monetary easing during its meeting later this month continued fueling uncertainty and is contributing to range-bound price action. 

Technical outlook

Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers Ltd., notes, "Near-term studies turned in full bearish mode while daily technicals are weakening and signal further downside. Daily close below 101.34 (cracked Fibo 61.8% of 99.52/104.30 rally) is needed to confirm fresh bears and expose initial target at 100.65, ahead of psychological 100.00 support. Close below here will open key short-term supports at 99.52 (16 Aug low) and 98.98 (24 Jun post-Brexit spike low and low of nearly three years)."

"Consolidation phase was so far capped by broken daily Kijun-sen line that marks initial resistance at 101.90. Next offer lies at 102.37 (Fibo 38.2% of 104.30/101.18 pullback) which is expected to cap extended rallies."

"Res:  101.90; 102.37; 102.74; 103.11
Sup:  101.35; 101.18; 100.65; 100.00"