A sizeable fall in retail sales may reignite investor fears of a hard US landing. Private consumption contributes over 60% to the US economy.
Is the US economy heading for a recession?
Bloomberg TV Asia Pacific Chief Markets Editor David Ingles recently commented on the US economy. He said,
“Alas, looks like the US economy is cooling quicker than most analysts think. The Bloomberg US Economic Surprise Index has dropped to a 9-year low.”
Short-term Forecast: Bearish
USD/JPY trends depend on US retail sales and central bank commentary. Lower-than-expected US retail sales could signal September and December Fed rate cuts. Bank of Japan support for a July rate hike and cut to JGB purchases would also narrow interest rate differentials.
Investors should remain alert as the US retail sales loom. Monitor real-time data, central bank commentary, and expert commentary to adjust your trading strategies accordingly. Stay updated with our latest news and analysis to manage USD/JPY volatility.
USD/JPY Price Action
Daily Chart
The USD/JPY sat above the 50-day and 200-day EMAs, sending bullish price signals.
A USD/JPY breakout from 158.500 would support a move toward 160. A return to 160 could give the bulls a run at the July 3 high of 161.951.
Central bank commentary and US retail sales require consideration.
Conversely, a break below the 50-day EMA could signal a drop toward the 155 handle.
The 14-day RSI at 42.82 indicates a USD/JPY drop to 155 before entering oversold territory.
