USDJPY On Watch Ahead Of US Retail Sales Today
US Retail Sales Next
On the back of yesterday’s Empire State Manufacturing reading, focus today shifts to the latest US Retail Sales data. Following the negative readings seen over the prior month, the market is expecting a firm rebound in today’s data, reflected increased consumer activity amidst the decline in inflation recently. On the numbers front, analysts are forecasting headline retail sales to have risen 0.8% on the month, up from -1% the prior month while core retail sales are forecast to have risen 0.5%, up from -0.8% the prior month.
Market Reaction
If confirmed at this level, the data should generally be seen as risk positive. Any upside beat will obviously amplify the market reaction in terms of leading stocks higher near-term. If data undershoots forecasts, we can expect a risk off reaction with USD likely to trade higher via safe-haven demand. Given the backdrop of ongoing uncertainty around the US debt ceiling negotiations, USD support might grow stronger if a resolution doesn’t look to be forthcoming on the back of today’s talks.
Technical Views
USDJPY
For now, USDJPY continues to hold around the middle of the bull channel. While 132.91 holds as support, and with momentum studies bullish, the focus is on a further push higher with the 139.33 level and bull channel highs the next objective for bulls. To the downside, any break of the channel lows will open the way for a test of 127.24 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.