USD/JPY continues to consolidate daily losses below 113 after US data

• US weekly jobless claims comes in at 245K.
• Trade deficit widens in November.
• DXY stays at 3-month lows below mid-92s.

After fluctuating in a tight range on Wednesday, the USD/JPY pair came under pressure on Thursday and dropped to fresh weekly low at 112.65. Following that drop, the pair went into a consolidation phase and didn't show any reactions to the macroeconomic data releases from the United States. At the moment, the pair is trading at 112.82, down 0.35% on the day.

A sharp drop witnessed in the US 10-year T-bond yields on Tuesday and Wednesday combined with the year-end flows weighed on the greenback and dragged the US Dollar Index to its lowest level since late September at 92.34. Although today's data didn't offer any positive surprises, the bearish momentum lost strength in the last couple of hours as the T-bond yields started to recover their recent losses. As of writing, the index was at 92.38, down 0.3% on the day.

Today's data showed that the advance figure for seasonally adjusted initial claims was 245,000 in the week ending December 23, unchanged from the previous week. Other data revealed that the international trade deficit increased to $69.7 billion in November from $68.1 billion in October amid a $5.4 billion rise in imports.

With no more data left in the remainder of the day, the pair is likely to extend its sideways course ahead of the New Year's holiday.

Technical outlook

Valeria Bednarik, American Chief analyst at FXStreet, writes, "technical readings in the 4 hours chart maintain the risk towards the downside, as the pair remains below its 100 SMA, currently flat around 113.00, while technical indicators remain within negative territory, aiming to regain the downside after a limited upward correction, all of which favors additional slides, to be confirmed with a break below 112.60, the immediate support.

According to the analyst, technical supports for the pair align at 112.60, 112.20 and 111.75 while resistances are located at 113.00, 113.35, and 113.70.