USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.02% | 3.6 Pips |  |
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| Week to-date | -1.34% | -211.799 Pips |  |
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| January | -0.78% | -122.599 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, a mix of economic indicators depicts a varied economic outlook. Monthly Retail Trade in December showed a decrease to 0.4% from 0.7% in November, signaling a slowdown in consumer spending according to the Census Bureau. Contrary to this, the Retail Trade excluding Automobiles slightly improved to 0.4% from 0.2%. Furthermore, the Retail Trade Control Group experienced an increase to 0.7% in December from 0.4%, hinting at a selective increase in consumer purchases. The labor market presented contrasting signals with the Initial Unemployment Insurance Claims rising to 217,000 from 201,000 as reported by the Department of Labor, indicating some softening. On a brighter note, the U.S. Manufacturing Business Outlook perceived a significant rise to 44.3 points in January up from December’s revised negative value of -10.9, suggesting recovering business confidence.
Inflation dynamics showed mixed movements with an uptick in overall Consumer Price Index (CPI) Inflation Rate to 0.4% in December from 0.3% in November as per the Bureau of Labor Statistics. However, when excluding food and energy, the monthly rate decreased to 0.2% from 0.3%, and the 12-month CPI rate excluding these sectors also declined to 3.2% from 3.3%. Notably, the 12-month CPI rate overall increased to 2.9% from 2.7%, indicating persistent inflationary pressures primarily influenced by volatile sectors.
Considering the USDJPY currency pair’s slight rise of 0.02% to 155.77 with the market in consolidation, this array of U.S. economic data could introduce mild volatility. The mixed retail data and manufacturing rebound suggest underlying economic resilience, which might support the U.S. dollar. However, increased unemployment claims could put the dollar under pressure. Inflation rates illustrate that inflationary pressures are still present but with less intensity in core measures, potentially easing some rate hike pressures or sustaining existing policy paths. As a result, without major events, the USDJPY could remain range-bound with these economic influences balancing each other out in the short term.
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What can we expect from USDJPY today?
USDJPY on Thursday rose 0.02% to 155.77. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 155.14 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 156.53 or trades above daily pivot 155.83. While to the downside, the daily low of 155.20 and 155.14 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 156.53 would suggest bullish bias after recent positive movement.
For the week to-date, take note that USDJPY is bearish as the pair posted lower by -1.34%.
Key levels to watch out:
| R3 | 157.79 |
| R2 | 157.16 |
| R1 | 156.46 |
| Daily Pivot | 155.83 |
| S1 | 155.14 |
| S2 | 154.51 |
| S3 | 153.81 |