USD/JPY turns higher, back near 112.00 handle post-US retail sales
| • US monthly retail sales data for August disappoint across all parameters.
• USD seemed to benefit from an upward revision of previous month’s readings.
• Risk-on mood weighing on JPY and remains supportive of some fresh up-move.
The USD/JPY pair reversed early dip to an intraday low level of 111.75 and is now headed back towards the top end of its daily trading range post-US macro data.
After languishing in negative territory for the majority of the European session, the US Dollar gained some positive traction and seemed largely unaffected by today's disappointing release of US monthly retail sales.
The headline figure came in to show a modest 0.1% m/m growth in August, while core retail sales (excluding automobiles) and control group sales recorded a growth of 0.3% and 0.1% respectively.
The weaker than expected readings, however, were largely offset by a sharp upward revision of previous month's readings and thus, provided a minor lift to the greenback.
This coupled with the prevalent risk-on mood continued denting the Japanese Yen's safe-haven status and remained supportive of the pair's fresh leg of up-move back towards the 112.00 handle.
Technical levels to watch
A follow-through up-move is likely to get extended towards August swing higher level of 112.15 before the pair eventually darts towards 112.80 intermediate resistance en-route the 113.00 handle.
On the flip side, the 111.75-70 region might continue to protect the immediate downside and is followed by support near mid-111.00s and 50-day SMA, around the 111.35 region.
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