USD/JPY bounces off lows, still in red just above mid-106.00s

   •  A modest USD retracement prompts some profit-taking slide.
   •  Aso's attempt to jawbone JPY failed to impress the bulls.
   •  Traders now eye US macro release for fresh impetus.

The USD/JPY pair extended its steady descent through the Asian session on Thursday and eroded a part of previous session's strong gains to over 2-week tops. 

Investors looked past yesterday's upbeat US GDP data, with easing geopolitical tensions, which tends to dent the Japanese Yen's safe-haven appeal, failing to provide any fresh bullish impetus. A modest US Dollar retracement was seen as one of the key factors prompting some profit-taking, especially after a single day upsurge of around 170-pips. 

Meanwhile, the Japanese finance minister Aso's attempt to jawbone the domestic currency lower did little to lend any support and stall the pair's corrective slide to an intraday low level of 106.40. 

Moving ahead, investors now look forward to the US economic docket - featuring the releases of core PCE price index, the usual initial weekly jobless claims, Chicago PMI and revised UoM consumer sentiment index, which might provide some impetus during the early NA session.

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet: “The 5,10, and 21 MAs are in the process of bottoming out (shedding bearish bias), while the upside is being capped by the descending 50-day MA So, the pair could consolidate in 106.00-107.00 range before moving higher towards 107.90-108.00.”

“However, holding on to gains above 107.00 (and extending the rally towards 109.00) will be a tough task as long as the 10-week MA is trending southwards,” he adds further.