USD Continues to Struggle Against the YEN Despite Strong US Retail Sales

Free $100 Forex No-Deposit Bonus

The USD continued to struggle against the Japanese Yen on Friday despite an impressive round of US retail sales. The USD/JPY currency pair continues to trade within a descending channel in the 60-min chart.

The pair is pinned slightly above the 100-hour SMA while the 200-hour SMA is a few levels above it. The currency pair made a slight rebound on Friday but quickly faced resistance from the bearish trendline.  It now appears to have resumed course on a previous sideways channel.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair is trading at the back of a relatively busier US market compared to the Japanese market. Earlier in the week, Japan’s producer price index for September missed the (MoM) expectation of 0.0% with a change of -0.2%. The (YoY) equivalent came short of -0.5% with -0.8%. Bank lending for the month grew slower than the expected (YoY) growth of 7.5% with 6.4%. However, machinery orders for August beat both the (MoM) and (YoY) expectations of -1% and -15.6%, respectively with 0.2% and -15.2%. Industrial production for August missed the expected (YoY) change of -13.3% with a change of -13.8%.

In the US, the consumer price index ex-food and energy for September missed the expectations of 1.8% with 1.7% (YoY). The (MoM) equivalent matched the expectation of 0.2%. On Friday, the Michigan Consumer Sentiment Index for October beat 80.5 with 81.2. The US retail sales control group for September outperformed 0.2% with 1.4%. Retail sales in general beat the (MoM) expectation of 0.7% with 1.9% while retail sales ex-autos beat 0.5% with 1.5% (MoM).

USD/JPY Technical Analysis (the 60-min Chart)

Technically, the USD/JPY currency pair appears to be trading within a descending channel in the 60-min chart. This indicates a short-term bearish bias in the market sentiment. The current movement appears to have pushed it to a previous pattern of a sideways channel.

The bulls will be targeting short-term profits at around 105.732 or higher at 106.006. On the other hand, the bears will target short-term pullback profits at around 50% and 38.20% fib levels at 105.134 or and 104.857, respectively.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to be trading within a descending channel. This indicates a significant long-term bearish bias in the market sentiment. The pair is now pinned just above the 61.80% fib level on the way down. 

The bears will target long-term profits at around 104.260 or lower at 103.044. On the other hand, the bulls will look to pounce at around 50% and 38.20% fib levels at 106.405 and 107.622, respectively.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.