News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Heads Up:🇫🇷 Unemployment Benefit Claims (AUG) due at 10:00 GMT (15min)Previous: -172.2Khttps://fxnews.org/?/economic-calendar#2020-09-25
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/ImXreWFFFY
  • An economic calendar is a resource that allows traders to learn about important economic information scheduled to be released. Stay up to date on the most important global economic data here: https://t.co/JdvW6HNuqV https://t.co/SbVPuUmpTU
  • 🇮🇹 Consumer Confidence (SEP)Actual: 103.4Expected: 100.8Previous: 101.0https://fxnews.org/?/economic-calendar#2020-09-25
  • 🇮🇹 Business Confidence (SEP)Actual: 92.1Expected: 87.5Previous: 87.1https://fxnews.org/?/economic-calendar#2020-09-25
  • 🇮🇹 Consumer Confidence (SEP)Actual: 103.4Expected: 100.8Previous: 100.8https://fxnews.org/?/economic-calendar#2020-09-25
  • 🇮🇹 Business Confidence (SEP)Actual: 92.1Expected: 87.5Previous: 86.1https://fxnews.org/?/economic-calendar#2020-09-25
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.91%, while traders in EUR/GBP are at opposite extremes with 67.79%.See the summary chart below and full details and charts on FxNews: https://fxnews.org/?/sentiment https://t.co/vQ8iSnCFKO
  • Heads Up:🇮🇹 Consumer Confidence (SEP) due at 08:00 GMT (15min)Expected: 100.8Previous: 100.8https://fxnews.org/?/economic-calendar#2020-09-25
  • Heads Up:🇮🇹 Business Confidence (SEP) due at 08:00 GMT (15min)Expected: 87.5Previous: 86.1https://fxnews.org/?/economic-calendar#2020-09-25
USD/JPY Rate May Fall on Disappointing US Retail Sales Data

USD/JPY Rate May Fall on Disappointing US Retail Sales Data

2020-08-14 07:00:00
Daniel Moss, Analyst
Share:

USD/JPY, Economic Surprise Index, US Fiscal Stimulus, Congress – Talking Points:

  • Positive economic data has served to underpin the US Dollar against its Japanese counterpart
  • USD/JPY rates at risk of pullback ahead of upcoming retail sales data for July
  • Rising Wedge pattern hints at near-term correction.

Asia-Pacific Recap

The ASX 200 climbed alongside the risk-sensitive Australian Dollar during the Asia-Pacific trading session, as the US Dollar and haven-associated Japanese Yen held relatively steady.

US 10-year Treasury yields slid back towards 70 basis points whilst both gold and silver fell. The New Zealand Dollar extended its 5-day decline from its monthly high after the island nation announced a further 13 cases of Covid-19.

Looking ahead, Euro-area second quarter GDP data headlines the economic docket ahead of US retail sales for July.

USD/JPY Rate May Fall on Disappointing US Retail Sales Data

Market reaction chart created using TradingView

USD/JPY Underpinned by Positive Data, Senate Impasse

Positive economic data out of the United States appears to have been the primary driver behind the USD/JPY exchange rate’s recent recovery from the July low, as investors mull the lack of progress in fiscal stimulus talks between Republicans and Democrats.

However, recent employment data suggests there may not be as dire a need for addition fiscal measures, as the unemployment rate fell to 10.2%, weekly jobless claims registered its smallest increase since the pandemic began and the monthly nonfarm payrolls report showed the US economy added another 1.76 million jobs in July.

That being said, the cessation of several aspects of the $2.2 trillion CARES Act seems to be fueling fears that the local economy is hurtling towards a fiscal cliff-edge. Enhanced unemployment benefits and a moratorium on evictions expired at the end of last month.

USD/JPY Rate May Fall on Disappointing US Retail Sales DataUSD/JPY Rate May Fall on Disappointing US Retail Sales Data

Data Source – Bloomberg

Nevertheless, surprisingly better-than-expected fundamental data looks to be keeping these fears at bay for the time being and is reflected in the positive correlation seen between the Greenback and the Citi Economic Surprise Index for the US. They have been notably rising in tandem for the majority of August.

Therefore, investors should continue to intently monitor US economic releases as positive data may continue to buoy the US Dollar against its ‘safe haven’ counterpart, the Japanese Yen.

USD/JPY Daily Chart – 107 Level Proving a Challenge for Buyers

USD/JPY Rate May Fall on Disappointing US Retail Sales Data

USD/JPY daily chart created using TradingView

A pullback to resistance-turned-support at the 106 level looks in the offing for USD/JPY rate, as price struggles to overcome the May 29 low (107.07) and the RSI reverses towards its neutral midpoint.

That being said, the 50-day moving average may direct USD/JPY higher should sellers fail to hurdle support at the 38.2% Fibonacci (106.65).

That would probably validate the break of the Descending Channel that had successfully directed price lower since the start of June and opening a path to test the sentiment-defining 200-DMA (107.72).

To that end, an extension of the US Dollar’s recent climb against its haven-associated counterpart looks likely if USD/JPY remains constructively positioned above the June low (106.07).

USD/JPY 2-Hour Chart - Rising Wedge Hints at Impending Breakdown

USD/JPY Rate May Fall on Disappointing US Retail Sales Data

USD/JPY 2-hour chart created using TradingView

Zooming into a two-hour chart appears to contradict the relatively bullish outlook seen on higher timeframes, with price carving out a bearish Rising Wedge pattern and failing to breach key psychological resistance at the 107 level.

The RSI also hints at a potential correction in USD/JPY rates as it fails to follow price to higher highs and snaps its constructive uptrend extending from the July 31 extremes.

Furthermore, the MACD line’s downward slope seems to be intensifying and could be indicative of building bearish pressure.

With that in mind, a break below wedge support and the 38.2% Fibonacci may ignite a correction back to the 200-period moving average (106.20) and the 106 level.

USD/JPY BULLISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -4% 9% 0%
Weekly -14% 0% -10%
What does it mean for price action?
Get My Guide

-- Written by Daniel Moss, Analyst for FxNews

Follow me on Twitter @DanielGMoss

Building Confidence in Trading
Building Confidence in Trading
Recommended by Daniel Moss
Building Confidence in Trading
Get My Guide

FxNews provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES