- Retail sales in the U.S. rise less than expected in September.
- US Dollar Index drops to 95 area.
- USD/JPY stays near 1-month lows ahead of Wall Street’s opening bell.
After dropping to its lowest level since September 13 at 111.62, the USD/JPY retraced a small portion of its daily losses but failed to extend higher toward the 112 mark as greenback came under a fresh bearish pressure following the dismal retail sales figures. As of writing, the pair was trading at 111.90, losing 0.3% on the day.
According to the U.S. Census Bureau, retail sales grew by 0.1% on a monthly basis in September and fell short of the market expectation of 0.5%. Although the NY Fed’s Empire State Manufacturing Survey showed that the business activity in the regional manufacturing sector expanded by a higher-than-expected pace with the headline index improving to 21.1 in October from 19 in recorded in September, the US Dollar Index dipped below 95 with the initial market reaction. At the moment, the index is down 0.18% on the day at 95.05.
With the U.S. data out of the way, investors will be looking at how Wall Street starts the day to get a fresh clue about the risk perception in the U.S. session. A low risk-appetite is likely to provide an additional boost to the safe-haven JPY.
Later in the session, business inventories from the U.S. will be releases as well, which is unlikely yo receive a significant reaction from the market.
Technical levels to consider
The pair could face the first technical support at 111.55 (100-DMA) ahead of 110.85 (Sep. 10 low) and 110 (psychological level). Resistances, on the other hand, could be seen at 112 (psychological level/50-DMA), 112.50 (Oct. 12 high) and 113.10 (20-DMA).
Share
