USD/JPY stays in red below the 109 handle ahead of US data

• Risk-off mood helps JPY gather strength on Thursday.
• The pair stays in its consolidation phase since the flash crash.
• Coming up: Weekly jobless claims and Philly Fed Manufacturing data from the U.S.

After failing to hold above the 109 mark on Wednesday, the USD/JPY pair retraced a small portion of its weekly gains on Thursday and was last seen trading at 108.78, losing 0.28% on a daily basis.

The risk-off mood that seems to have taken control of the price action today helps the JPY find demand as a safe-haven. Despite the fact that the British PM May survived the no confidence motion yesterday, the uncertainties surrounding the next steps in Brexit talks weighed on the UK's FTSE 100, which was down nearly 1% on a daily basis. The S&P 500 Futures is also losing 0.35% to point to a negative opening on Wall Street.

On the other hand, ahead of the weekly jobless claims data and Philly Fed's Manufacturing Survey, the US Dollar Index stays in its tight range above the 96 mark and making it difficult for the pair to continue to push lower. In fact, since the flash crash witnessed in early January, the pair has been moving up and down in a 120-pip range, struggling to make a decisive move in either direction.

Key technical levels

The pair could face the initial resistance at 109 (psychological level/Jan. 16 high) ahead of 109.65 (Jan. 2 high) and 110 (psychological level). On the downside, supports are located at 108.40 (Jan. 16 low), 107.80 (Jan. 10 low) and 106.75 (Jan. 3 low). Meanwhile, the RSI indicator on the daily chart moves sideways a little below the 50 level, confirming the near-term neutral outlook.