Usdjpy Crosses Resistance Ahead Of Us Retail Sales

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Usdjpy Crosses Resistance Ahead Of Us Retail Sales

USD/JPY Crosses 149.50 Ahead Of US Retail Sales

Tuesday's session appears to be good for the USD/JPY as it is still in the green for the day and trades near the 149.60 handle. One of the factors that support the positive price action in the USD/JPY is the USD strength and the US t-bond yield recovery.

Looking ahead, the investors await the retail sales data from the US side. According to the market players, an increase of 0.3% in the retail sales data is expected during September.

Inflation Continues To Fall

On the other hand, there is also a factor that is capping the USD/JPY advance, and it is the dovish Fed comments. According to the Fed president from Chicago, inflation is indeed falling, and thus, there's a chance of quicker rate cuts in the upcoming months.

On the other hand, the Fed's president from Philadelphia believes that the interest rates will stay steady unless the data changes significantly.

Earlier, the data about the NY Empire State Manufacturing Index was released, which showed a decline in the month of October. A little earlier, the CPI (USA) decreased to 3.7% in September (annual basis), which is also dovish for the US Dollar.

On the JPY front, the finance minister of Japan decided not to comment on the IMF official's statement about currency intervention. He also added that. there is no need to delve into any details about the matter.

Now, it appears that the USD/JPY next direction will be decided after the release of the Retail Sales and then the Fed speakers.

But despite the outcome of these US economic indicators, the risk of the BoJ intervention remains very real as we are still close to the 150.00 handle. So, if the data coming out of the US is positive, it will provide a boost to the USD/JPY & thus will increase the chances of intervention.

On the contrary, any bearish data from the US will mean a decline in the USD/JPY, and in that case, there will be no intervention. In a sense, we can say that the upside risks far outweigh the risks present at the downside.

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