USD/JPY Rises On Robust US Retail Sales Data

Fundamental Analysis

* Retail Resilience: The Japanese Yen weakened against the U.S. dollar after the market reacted to stronger-than-expected U.S. Retail Sales data. According to the U.S. Commerce Department, retail sales remained flat in June, defying Wall Street’s forecast of a 0.3% decrease in spending, as reported by Bloomberg. Additionally, May’s retail sales figures were revised upward from a previously reported 0.1% increase to 0.3%. Despite this data, the prevailing expectation that the Federal Reserve might start cutting interest rates in September amid cooling inflation remained unchanged, helping to ease fears of a significant economic slowdown.

Technical Analysis

* Technical Breakout: USDJPY was traded higher following prior rebound from the support level 157.75. MACD which illustrate diminishing bearish momentum signal suggest the pair to further extend its rebound.

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards 159.35. Conversely, a potential reversal is also to be expected and the price could head towards 157.75.

Potential Risks

Moving ahead, investors will focus on upcoming U.S. data, such as the US Building Permits, Housing Starts, Industrial Production and the Fed Beige Book which will be released later on Wednesday. Additionally, speeches from Federal Reserve officials Barkin and Waller are anticipated. The data suggests the possibility of yen-buying interventions worth approximately 2 trillion yen on Friday.

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Monitoring

Stay updated on US and Japan data, central bank updates and any shifts in the US Dollar’s strength by following PU Xtrader’s financial news page.

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