USD/JPY jumps to session high at 100.60 after strong US data

The USD/JPY pair witnessed a minor up-tick and has now moved to session high level following the release of better-than-expected US economic data.

According to the data released just a while ago, US monthly durable goods orders rebounded sharply in July and posted a strong-than-expected growth of 4.4% as compared to 3.5% expected growth and 4.2% contraction recorded in June. Core durable goods orders (ex transportation) also posted better-than-expected growth of 1.5% versus June's -0.3% and 0.5% growth forecasted.

Meanwhile, weekly jobless claims also printed better-than-expected reading and showed claims dropping by 1,000 to 261k during week ended August 19. The reading was better-than consensus estimates forecasting a rise of 3,000 to 265k.

The pair, however, remained confined in a narrow trading band as weak sentiment surrounding equity markets was seen extending support to the safe-haven appeal of the Japanese Yen and is constraining any meaningful recovery for the pair.

Market participants, however, remained in wait-and-watch mood ahead of the closely monitored speech by Federal Reserve Chairwoman Janet Yellen at the central bank’s summer summit at Jackson Hole on Friday.

Technical outlook

Omkar Godbole, Editor and Analyst at FXStreet, notes, "Technical charts hardly indicate anything given the spot has been restricted to a largely narrow range of 100.71 to 100.00 since last Thursday. Though we have had a bearish break on Point and Figure chart, it is still advisable to wait for a breakout."

"An upside break could yield a re-test of 101.40-101.50 levels, while a bearish break from the range would shift risk in favor of a drop to 99.00 handle."