USD/JPY Gains After Strong US Retail Sales

Fundamental Analysis

* Retail Resilience: The Japanese Yen weakened against the U.S. dollar as the market absorbed stronger-than-expected U.S. Retail Sales data. The U.S. Commerce Department reported that retail sales remained flat in June, contrary to Wall Street’s prediction of a 0.3% decline in spending, based on Bloomberg data. Additionally, May’s retail sales figures were revised upward to a 0.3% increase from the previously reported 0.1%. This data did not alter the prevailing view that the Federal Reserve might begin cutting interest rates in September amid cooling inflation, which helped to alleviate concerns about a sharp 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.

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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 Eurozone data, central bank updates and any shifts in the US Dollar’s strength. by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.