USD/JPY to Rise as US Dollar Firms on 9.8% Jump in Retail Sales
US DOLLAR OUTLOOK: USD/JPY PRICE ACTION MIGHT STRENGTHEN AS RETAIL SALES, JOBLESS CLAIMS DATA TOPS FORECAST
- USD/JPY price action might gain ground following robust economic data out of the US
- Retail sales spiked 9.2% higher last month while latest weekly jobless claims improved
- The US Dollar has had a relatively muted reaction so far as Treasury yields move lower
USD/JPY price action is gyrating this morning as the US Dollar searches for direction following the latest data dump crossing market wires just now. US Dollar bulls interestingly are struggling to move the needle despite notably better-than-expected monthly retail sales and weekly jobless claims reports. The figure for headline retail sales exploded 9.8% higher month-over-month and sharply tops the market forecast looking for a 5.8% rise. Jobless claims were also solid at 576,000 versus the consensus of 700,000. These strong numbers likely come on the coattails of covid stimulus checks coupled with an overall successful vaccine rollout and reopening of the US economy.
USD/JPY PRICE CHART: 15-MINUTE TIME FRAME (14 APR TO 15 APR 2021)
USD/JPY price action popped 18-pips in the immediate aftermath of the data release, but the major currency pair has since retraced most of the move. Lack of direction for the US Dollar perhaps corresponds with a dip across Treasury yields with the ten-year now trading below 160-basis points. Nevertheless, on the heels of this morning’s robust economic data release, USD/JPY bulls might look to defend technical support around the 108.70-price level and guide the US Dollar higher. The US Dollar does face technical resistance, however, posed by the descending trendline extended through its recent series of lower highs. Reclaiming this obstacle could prove difficult if Treasury yields remain under pressure.
Connect with @RichDvorakFX on Twitter for real-time market insight
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.