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12 Mar 2015
USD/JPY might drop to 120.00 on a weak US retail sales print – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, explains that a soft US retail sales print might drag treasury yields lower, which would boost the Yen, leading to a fall by USD/JPY towards 120.00.
Key Quotes
“The pair clocked a high of 122.00 on March 10, however, gains could not be sustained as weakness in the US stock markets, coupled with the falling yields across the Eurozone dragged the Treasury yields lower.”
“Markets now await the US advance retail sales print for Febraury. The data is expected to show the retail turnover rose 0.3% in Febraury, compared to the 0.8% decline registered in January.”
“The pair could extend the drop to 120.00 on weak US retail sales data as the weak print could drive Treasury yields lower.”
“Another month of contraction in the retail sales could raise serious doubts regarding the positive effect of weak energy prices.”
“The Fed has repeatedly termed falling energy prices as a net positive for the US economy as it is expected to translate into a rise in consumption. However, another month of weak retail sales would contradict this theory.”
“Moreover, the weak retail sales data could trigger a minor corrective rally in the USD and the Treasury yields, if not alter the June rate hike expectations altogether.”
“On technical charts, the pair has formed a head and shoulder pattern on the hourly time frame with the neckline support at 121.00. A break below the same would open doors for a target of 120.00 levels. a weak US advance retail sales data could help the pair break below the neckline support at 121.00 and fall to 120.00 levels.”
Key Quotes
“The pair clocked a high of 122.00 on March 10, however, gains could not be sustained as weakness in the US stock markets, coupled with the falling yields across the Eurozone dragged the Treasury yields lower.”
“Markets now await the US advance retail sales print for Febraury. The data is expected to show the retail turnover rose 0.3% in Febraury, compared to the 0.8% decline registered in January.”
“The pair could extend the drop to 120.00 on weak US retail sales data as the weak print could drive Treasury yields lower.”
“Another month of contraction in the retail sales could raise serious doubts regarding the positive effect of weak energy prices.”
“The Fed has repeatedly termed falling energy prices as a net positive for the US economy as it is expected to translate into a rise in consumption. However, another month of weak retail sales would contradict this theory.”
“Moreover, the weak retail sales data could trigger a minor corrective rally in the USD and the Treasury yields, if not alter the June rate hike expectations altogether.”
“On technical charts, the pair has formed a head and shoulder pattern on the hourly time frame with the neckline support at 121.00. A break below the same would open doors for a target of 120.00 levels. a weak US advance retail sales data could help the pair break below the neckline support at 121.00 and fall to 120.00 levels.”