USD/JPY Current price: 107.24
- Market players giving their back to the dollar.
- US Retail Sales and NY manufacturing index up next.
The USD/JPY pair gapped higher at the weekly opening as instead of fear, relief dominated the weekly opening, after the US confirmed the attack on Syria was a one stand warning to the Assad regime. Equities opened higher, leading to a USD/JPY rally up to 107.60, although the positive momentum eased, and the dollar got dumped across the board, resulting in the USD/JPY pair trimming its early gains and stabilizing around 107.20 ahead of the release of US data, including the preliminary NY Empire State Manufacturing index for April, expected at 18.6 from previous 22.5, and March Retail Sales. Sales are seen up 0.4% monthly basis from a previous 0.1% decline, while the closely eyed Retail Sales control group figure is seen at 0.4% from the previous 0.1%. Seems unlikely that a better-than-expected number could be enough to trigger dollar demand, which stays out of market favor, while a discouraging reading will only exacerbate the current dollar's weakness
Technically, the risk of a downward extension is limited, as the 4 hours chart shows that the pair keeps developing above its 100 and 200 SMA, with the shortest trying to advance above the largest, while technical indicators hover within neutral territory with limited directional strength. Equities and yields will likely lead the way, with the added fact that the dollar is unattractive, and gains for the pair could be limited even it market's mood is positive.
Support levels: 106.90 106.60 06.25
Resistance levels: 107.50 0 107.90 108.20
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