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  • USD/JPY ignores Japan’s Retail Trade data for May, keeps the 107.10-25 range.
  • Japan’s May month Retail Trade dropped -12.3% YoY versus -11.6% expected.
  • The pair keeps struggling amid the risk-safety allures of the USD and JPY.
  • Risks of virus resurgence, trade war join geopolitical tension to dim the market’s mood.

USD/JPY rises to 107.24 as markets in Tokyo open for trading on Monday. Even so, the pair continues to look for a clear signal between the short-term trading range inside 107.10 and 107.25 area.

While Japan’s Retail Trade and Large Retailers’ Sales offered immediate direction to the pair, broad risk aversion wave, backed mainly by the coronavirus (COVID-19), dominates the trading sentiment off-late. Japan’s Retail Trade slumped 12.3% in May against -11.6% forecast on the yearly basis. Further, the Large Retailers’ Sales dropped 16.7% from -11.7% prior.

Read: Retail Sales fall 12.3% year/year, USD/JPY buyers step in to test session highs

The latest updates suggest that global COVID-19 deaths reach half a million with the figures from the current epicenter US also coming in as worrisome. Texas registered the seventh day of above 5,000 cases on Sunday whereas numbers from Los Angeles County surged by near-record of 2,542 to the total of 97,894 by Sunday. Elsewhere, China’s Anxin County announced heavy lockdown restrictions like the kind of Wuhan adhered to during the early outbreak of the virus. Furthermore, Tokyo registered 60 new cases to print the highest numbers since the state of emergency was ended on May 25.

Other than the virus woes, the trade war between the US and the rest of the global economies like the European Union (EU), the UK, China and Canada, are also exerting downside pressure on the market’s risk-tone. Additionally, fear of the India-China war and the US-Iran tussle also weigh on the trading sentiment.

While portraying this, the S&P 500 Futures drop 0.20% to 3,001 whereas Japan’s Nikkei 225 drops 1.35% to 22,180 by the press time.

Considering the lack of major data/events on the calendar, the pair traders will keep eyes on the risk catalysts for fresh impulse. It should be noted that the US Pending Home Sales and Dallas Fed Manufacturing Business Index may offer extra guidance to the traders.

Technical analysis

A downward sloping trend line from June 16 joins 50-day SMA to highlight 107.35/40 as a near-term key resistance area. However, the bears are likely to remain cautious ahead of the pair’s drop below May month’s low of 105.99.