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Japanese retail sales were unexpectedly strong in February, with a gain of 1.7%. This beat the estimate of -1.5% and easily ended a string of four consecutive declines. The Tankan indices slowed considerably in the fourth quarter. The Manufacturing index slowed fell to -8, down from zero. The Services index fell from 20 to 8 points.
In the U.S. the spotlight was on employment numbers, which were a disaster, as the COVID-19 virus has paralyzed much of the U.S. economy. Jobless claims soared to 6.6 million, more than double to 3.2 million a week earlier. Nonfarm payrolls fell by 701 thousand, much worse than the estimate of -100 thousand. The unemployment rate shot up to 4.4% up from 3.5 percent. The estimate stood at 3.8 percent. On the manufacturing front, the ISM Manufacturing PMI slowed to 49.1 in March, down from 50.1 a month earlier. Still, this easily beat the forecast of 44.9 points.
Updates:
We start with resistance at 111.69.
110.62 is next.
109.73 is protecting the 110 level, which has psychological significance.
108.70 (mentioned last week) is an immediate support level.
108.10 has switched to a support role after USD/JPY broke above it last week.
107.30 was tested throughout the week.
106.61 is next.
105.55 has held firm in support since mid-March.
104.65 is the final support line for now.
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USD/JPY Sentiment
I remain bullish on USD/JPY
The U.S. dollar has emerged as the primary safe-haven asset in the current crisis, as the yen has been forced to take a back seat. The greenback has performed fairly well despite some appalling job numbers, and the outlook for the dollar remains positive.
Safe trading!
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