USD/JPY recovers few pips after US data, back above mid-112.00s

The USD/JPY pair maintained it’s offered tone through early NA session but has now managed to recover few pips from session lows touched in the past hour.

The spot gained some positive traction after data released from the US showed initial weekly jobless claims dropped more than expected, to 260K during the week ended September 29 from previous week's reading of 272K. 

Adding to this, the US trade balance data showed deficit narrowed to $42.4 billion in August, down from previous month's $43.6 billion and $42.7 billion deficit expected. 

Except for the initial reaction, the US Dollar seemed lacking any strong follow through traction amid the prevalent softer tone around the US Treasury bond yields. 

Moreover, the prevalent cautious environment further supported the Japanese Yen’s safe-haven appeal and collaborated towards keeping a lid on any sharp up-move for the major. 

Today's US economic docket also features the release of factory orders data. However, the key focus would be on speeches by various FOMC members, namely - - the Fed Governor Jerome Powell, San Francisco Fed President John Williams, Philadelphia Fed President Patrick Harker and Kansas City Fed President Esther George.

Technical levels to watch

Any up-move beyond 112.70 level might continue to face fresh supply near the 113.00 handle, which if cleared could lift the pair towards 113.65-70 hurdle with some intermediate resistance near the 113.220-25 region.

Meanwhile, weakness below 112.30 level could get extended towards the very important 200-day SMA support near the 112.00 handle, below which the pair seems vulnerable to slide towards 111.65-60 horizontal support.