- USD/JPY headed for a break into the 105 handle?
- USD/JPY bulls need to get back above the 21-D SMA.
USD/JPY has had a hard time of it yet again, repeatedly failing below the 107 handle of late and was sent lower today on yet further disappointing data from the US economy, complementing sentiment for a less hawkish Fed. Currently, USD/JPY is trading at 106.30, down -0.26% on the day, having posted a daily high at 106.76 and low at 106.07.
USD/JPY made the lows after retail sales missed expectations by 0.2% sending US yields to the lowest level since January of this year to 2.80% - (The underlying detail showed relatively broad-based weakness too, though Jan was revised to show a slightly less weak 0.1% fall, from -0.3%).
Eyes were also turning to equities on Wall Street where a risk-off tone fuelled a bid in the yen on the China tariffs noises, reinstating fears around global trade wars.
US Q1 GDP outlook downgraded
At the same time, the retail control group, a subset used for GDP calculations, rose a mediocre 0.1% (0.4% expected), after a flat Jan outcome, prompting widespread Q1 GDP downgrades. The Atlanta Fed GDP tracking model trimmed its Q1 projection to 1.9% annualised from 2.5%.
In the meantime, Valeria Bednarik, chief analyst at FXStreet explained that the 4 hours chart shows that the risk remains skewed toward the downside, as the pair developed all through the day below its 100 SMA meeting selling interest on approaches to it, now an immediate resistance around 106.60.
The price on the daily sticks pierced the descending channel's resistance and is now trading below the 21-D SMA. The downside, below the 105 handle, 104.80 opens up territory with little chart support towards 100.70/99.00 on the charts.
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 securities. 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 Forex 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.