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Better US Data Helping USD/JPY Consolidate

Yesterday, we saw the USD/JPY fall sharply following poor US data in inflation, retail sales, and manufacturing. Today, we had better US data, and it  helped the USD/JPY stabilized after yesterday's dip. 

US Data:
Industrial Production m/m (Sept): 1.0%
Forecast: 0.4%
Previous: -0.2%
Jobless Claims this week: 264K
Forecast: 286K
Previous: 287K
Philly Fed Manufacturing Index (Oct): 20.7
Forecast: 19.9
Previous 22.5

Data on jobs and output were better than expected and the USD/JPY held above 105.50.

USD/JPY 1H Chart 10/16(click to enlarge)

We can see that price is holding above the previous low, and above the 105.50 handle. A break above 106.50 should clear a price bottom and suggest a bullish outlook at least in the short-term. Whether it will revive the larger uptrend will remain to be seen. 

It should be noted that price is stalling at the previous 2014-high of 105.44 made early in the year. This level was broken by September and is now being tested again as support. If price does not push back above 106.50, there is still downside risk to the 105.00 handle, then another common resistance earlier in the year around 104.

However, as the daily RSI tags 40 and stalls, we should anticipate a bullish continuation attempt.

USD/JPY Daily Chart 10/16(click to enlarge)