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Will the US Retail Sales result in a weak USD/JPY close?

November 15, 2019 10:30


Economic Event

Source: Economic Events November 15, 2019 - Admiral Markets' Forex Calendar

As we approach the weekly close, the US Retail Sales will catch the attention of traders, especially USD/JPY traders.

While the outlook for the Japanese Yen hasn't in fact changed over the last week, since US inflation came in below 2% at 1.8% last Wednesday and market participants not seeing any further dovishness from the Fed into the yearly end, markets seem a little too biased towards a "wait-and-see" approach from the US central bank.

That said, after USD/JPY pushed back towards 109.00/30, mainly driven by 10-year US-Treasury yields which took on bullish momentum in the first half of November while gaining over 20 basis points and driving the positive correlated USD/JPY higher, a disappointing US Retail Sales data set today could result in a weak weekly close in the USD/JPY.

Retail Sales data is expected to come in at 0.2% (MoM) for the month of October after a disappointing data set for September at -0.3%, showing the first decline in retail trade since February, mainly due to lower sales at motor vehicles, building materials, hobbies and online purchases.

So, any print below 0.2% and confirmation of the last Retail Sales prints leaves room for the Short-side in USD/JPY, which we also consider to be more attractive from a risk-reward-perspective with a first important target on the downside being found around 107.80/108.00:


Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between September 27, 2018, to November 14, 2019). Accessed: November 14, 2019, at 10:00pm GMT- Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2014, the value of the USD/JPY increased by 13.7%, in 2015, it increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, meaning that after five years, it was up by 4.1%.

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