USD/JPY continues to gain traction, taps 114.00 mark

The greenback buying interest picked-up pace during following the US economic releases, with the USD/JPY pair extending Wednesday's strong up-move to the 114.00 handle.

Data released from the US showed the Fed's preferred inflation gauge, Core PCE Index rising 0.3% m-o-m in January, taking the yearly rate to 1.7%. Meanwhile, a slight disappointment from personal spending, (0.2% vs. 0.3% expected) seems to have been negated by personal income that recorded a better-than-expected 0.4% inter-month rise during January.

Mostly in-line with consensus estimates data did little to distort the strong bullish sentiment surrounding the greenback. In fact, the key US Dollar Index extended its march higher, further towards the 102.00 handle after the release, and provided an additional boost to the pair.
 
Meanwhile, upbeat investors’ sentiment, as depicted by strong bullish sentiment around global equity markets, which tends to dent the Japanese Yen’s safe-haven demand, further collaborated to the pair’s strong up-move on Wednesday.

Up next is the release of US ISM manufacturing PMI, in a short while from now, and speech by Dallas Fed President Robert Kaplan, later during NY session, which would be looked upon for additional reinforcement for the pair’s ongoing momentum to fresh two-week highs.

Technical levels to watch

On a sustained break through 114.00 handle, the pair seems all set to head towards retesting 50-day SMA hurdle near 114.45-50 region with some intermediate resistance near 114.25 level. On the downside, 113.75-70 resistance break area now becomes immediate support, below which the pair is likely to drift back towards 113.25 support before eventually dropping to 113.00 round figure mark.