USD/JPY challenging highs near 50-DMA after US jobless claims

The greenback’s strong bullish rally remains uninterrupted, lifting the USD/JPY pair to 50-day SMA following the release of weekly jobless claims from the US.

Currently trading around 114.40 region, the pair maintained its strong bid tone near two-week highs after data released from the US showed the number of individuals filing first-time claims for state unemployment insurance dropped more-than-expected to 223K during the week ended Feb. 24.

The reading was much better-than consensus estimates for 243K expected, and last week's 244K, and provided an additional boost to the already strong bullish momentum surrounding the US Dollar, against the backdrop of recent hawkish comments from various Fed policymakers that fueled expectations for a March Fed rate-hike action, and lifted the pair to the highest level since mid-Feb. 

With Thursday's economic data out of the way, investors now shift their focus to the Japanese inflation data, scheduled for release during early Asian session on Friday ahead of the Fed Chair Janet Yellen's appearance later during NA session.

Technical levels to watch

On a sustained move above 114.50-55 region, the pair is likely to aim towards 114.95 hurdle (Feb. 15 high) before heading towards its next hurdle near 115.35-40 region. On the flip side, 114.25-20 area now seems to protect immediate downside, which if broken seems to drag the pair back below 114.00 handle towards testing a strong resistance, now turned support, near 113.75-70 zone.