USD/JPY clings to recovery gains closer to 113.50 level ahead of US data

The greenback extended Wednesday's recovery move, with the USD/JPY pair building on to its move back above 113.00 handle. 

Currently trading around 113.40 region, the pair snapped seven consecutive days of losing streak and recover some of Tuesday's lost ground to the lowest level since Nov. 30 amid broad based US Dollar pull-back.

The pair, however, has failed to witness a strong follow through action as prevalent cautious sentiment around European equity markets is lending some support to the Japanese Yen's safe-haven appeal and hindered recovery move just below mid-113.00s. 

Later during NA session, US economic docket, featuring the release of CPI print, industrial production and capacity utilization data, would now be looked upon for fresh impetus. Also in focus would be the Fed Chair Janet Yellen's speech, later during NY session, which might provide some fresh insight over the central bank's near-term monetary policy stance and help investors determine the pair's near-term trajectory.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet notes, "The daily RSI is yet to hit the oversold territory, which indicates potential for a further sell-off in the pair. He first sign of bearish exhaustion would be the bearish crossover between 50-MA and 200-MA on 4-hour chart. The crossover often called as a ‘death cross’ is almost always a lagging indicator/contrary indicator. On the higher side, only a break above 113.75 would signal short-term bearish invalidation."