- The USD remains on the defensive after mixed US retail sales data.
- Risk-on mood/rising US bond yields should help limit the downside.
- Focus shifts to next week’s key event risks - FOMC and BoJ meetings.
The USD/JPY pair quickly bounced around 15-pips from daily lows and is currently placed in the neutral territory, around the 108.10 region post-US retail sales data.
The pair continued with its struggle to sustain/built on the recent positive momentum further beyond the 100-day SMA barrier and witnessed a modest intraday pullback amid the prevailing selling bias surrounding the US Dollar, which dragged the pair back below the 108.00 handle.
However, a strong follow-through pickup in the US Treasury bond yields coupled with encouraging trade-related developments continued weighing on the Japanese Yen's relative safe-haven status and helped limit the intraday downtick from multi-week tops set earlier this Friday.
Mixed US retail sales fail to provide any impetus
Meanwhile, the latest leg of a sudden pick up over the past hour or so came after stronger-than-expected data, showing that headline retails sales rose 0.4% as compared to 0.2% expected. Adding to this, the previous month's reading was also revised higher to 0.8% from 0.7% reported previously.
The positive reading, to a larger extent, was negated by a slight disappointment from core retail sales figures, which remained flat month-over-month in August as against the previous month's strong growth of 1.0%. On the other hand, the closely watched Retail Sales Control Group matched consensus estimates and rose 0.3%.
With Friday's US macro data out of the way, it will now be interesting to see if the pair is able to attract any fresh buying interest or continues with its subdued/range-bound trading action as the focus now shifts to next week's key event risks - the FOMC decision on Wednesday and BoJ meeting on Thursday.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.