“¢ The USD regains positive traction and helps reverse an early dip.
“¢ Risk-off mood/sliding US bond yields kept a lid on further gains.
“¢ Traders now eye US monthly retail sales data for some impetus.
The USD/JPY pair reversed an early European session dip to 113.55 area and is currently placed at the higher end of its daily trading range ahead of the US monthly retail sales.
The US Dollar stood tall near 18-month tops, around mid-97.00s, and was seen as one of the key factors driving the pair higher, albeit a combination of negative forces kept a lid on any runaway rally.
Fears of slowing global growth reemerged on Friday following the disappointing release of Chinese macro data and dismal Euro-zone PMI prints for December and dampened investors’ appetite for riskier assets.
The risk-off mood was evident from a sea of red across global equity markets, further reinforced by the ongoing slide in the US Treasury bond yields, and underpinned the Japanese Yen’s safe-haven demand.
Adding to this, uncertainty over the Fed’s rate hike path in 2019, especially after the US President Donald Trump latest criticism on Thursday further collaborated towards capping gains.
Next in focus will be the US economic docket, featuring the release of the monthly retail sales data, which will be looked upon for some fresh trading impetus on the last trading day of the week.
Technical outlook
Valeria Bednarik, FXStreet’s own American Chief Analyst writes: “The USD/JPY pair 4 hours chart shows that the price continues developing well above its 100 and 200 SMA which run parallel around 113.20. To the upside, a recovery past 114.00 could send the pair up to the 114.40/50 price zone.”
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