USD/JPY recovers lost ground after mixed US economic data
|The USD/JPY pair reversed pre-US economic data slide to session low near 114.20 region and has moved mildly into positive territory.
Currently trading around 114.80 region, the pair caught some bids after US Producer Price Index (PPI) matched consensus estimates and came-in to show a rise of 0.3% m-o-m and 1.6% on yearly basis. Being a leading indicator of consumer price inflation (CPI), in-line with estimates PPI print negated a slight disappointment from retail sales data. In fact, monthly retail sales registered a 0.6% m-o-m growth in December as compared to 0.7% expected, but turned far better from a tepid 0.1% growth recorded in November.
Upbeat PPI print stalled the ongoing selling pressure around the greenback and provided a much needed respite for the US Dollar bulls, helping the pair to defend 114.00 handle for the time being.
Technical outlook
Omkar Godbole, Analyst and Editor at FXStreet notes, "The strong retail sales number and producer price index figure could see the pair break above the critical resistance at 116.04 levels. On the other hand, a negative retail sales print would be a bearish surprise, thus opening doors for a drop to 113.26 (50-DMA). Only a daily close above 116.04 would revive bullishness."
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