USD/JPY gains some traction, above 108.00 mark post-US retails sales
|- The USD remains on the defensive after mixed US retail sales data.
- Risk-on mood/rising US bond yields should help limit the downside.
- Focus shifts to next week’s key event risks - FOMC and BoJ meetings.
The USD/JPY pair quickly bounced around 15-pips from daily lows and is currently placed in the neutral territory, around the 108.10 region post-US retail sales data.
The pair continued with its struggle to sustain/built on the recent positive momentum further beyond the 100-day SMA barrier and witnessed a modest intraday pullback amid the prevailing selling bias surrounding the US Dollar, which dragged the pair back below the 108.00 handle.
However, a strong follow-through pickup in the US Treasury bond yields coupled with encouraging trade-related developments continued weighing on the Japanese Yen's relative safe-haven status and helped limit the intraday downtick from multi-week tops set earlier this Friday.
Mixed US retail sales fail to provide any impetus
Meanwhile, the latest leg of a sudden pick up over the past hour or so came after stronger-than-expected data, showing that headline retails sales rose 0.4% as compared to 0.2% expected. Adding to this, the previous month's reading was also revised higher to 0.8% from 0.7% reported previously.
The positive reading, to a larger extent, was negated by a slight disappointment from core retail sales figures, which remained flat month-over-month in August as against the previous month's strong growth of 1.0%. On the other hand, the closely watched Retail Sales Control Group matched consensus estimates and rose 0.3%.
With Friday's US macro data out of the way, it will now be interesting to see if the pair is able to attract any fresh buying interest or continues with its subdued/range-bound trading action as the focus now shifts to next week's key event risks - the FOMC decision on Wednesday and BoJ meeting on Thursday.
Technical levels to watch
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