USD/JPY trades sideways after US retail sales, still above 145.00

  • USD/JPY is trading neutral at the 145.55 area after reaching a low of 145.10.
  • US retail sales released strongly and markets are betting on a Fed rate hike in November.
  • Divergences in monetary policy weighed on the yen, which was unable to benefit from strong GDP data.

On Tuesday, the pair USD/JPY traded flat while the dollar seemed to consolidate. On the other hand, the yen continues to trade vulnerable to the dovish stance of the Bank of Japan and the divergence of monetary policies among its peers.

US retail sales showed that the US economy remains strong. Headline Sales rose 0.7%m/m, above 0.4% expected, while excluding autos were also strong, coming in at 1% vs. 0.4% expected.

As for the next meeting of the Federal Reserve (Fed), the prevailing expectation is that there will be no hike in September. However, the odds of a 25 basis point adjustment in November top out at around 40%. That said, attention now turns to Wednesday’s Federal Open Market Committee (FOMC) meeting as investors look to future guidance for clues to get a different perspective on where officials stand.

Despite the good data for the Gross Domestic Product (GDP), the yen continues to trade downward. It was reported on Tuesday that the economy grew 1.5% q/q during the second quarter, an annualized rate of 6% on both counts. On the upside, speculation of a possible Bank of Japan intervention to stop the currency’s slide is the only hope for the Yen, while USD/JPY consolidated above the 145.00 level.

USD/JPY levels

Technical analysis on the daily chart supports a short-term bullish view on USD/JPY. The Relative Strength Index (RSI) maintains its favorable position above the midline, showing a bullish bias. On the other hand, the moving average convergence divergence (MACD) shows green bars, underscoring the strengthening bullish momentum. Furthermore, the pair is sitting above the 20-, 100-, and 200-day SMAs, which suggests that the bulls are firmly in control of the bigger picture.

Support levels: 145.00, 144.70, 144.00.
Resistance levels: 145.70, 146.00, 146.50.

USD/JPY Daily Chart

USD/JPY

Overview
Last price today 145.54
Today Change Daily -0.01
today’s daily variation -0.01
today’s daily opening 145.55
Trends
daily SMA20 142.09
daily SMA50 141.82
daily SMA100 138.65
daily SMA200 136.47
levels
previous daily high 145.58
previous daily low 144.65
Previous Weekly High 145
previous weekly low 141.51
Previous Monthly High 144.91
Previous monthly minimum 137.24
Fibonacci daily 38.2 145.23
Fibonacci 61.8% daily 145.01
Daily Pivot Point S1 144.94
Daily Pivot Point S2 144.33
Daily Pivot Point S3 144.02
Daily Pivot Point R1 145.87
Daily Pivot Point R2 146.19
Daily Pivot Point R3 146.8

Source: Fx Street

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