USD/JPY refreshes session tops after mixed US data

   •  Slightly better Core CPI offset softer headline CPI.
   •  US Dec. monthly retail sales miss expectations. 
   •  USD gains some respite post-macro releases. 

The USD/JPY pair reversed a dip to sub-111.00 level and headed towards the top end of its daily trading range post-US macro releases. 

The US Dollar selling pressure abated, at least for the time being, after data released from the US showed core CPI (excluding food and energy) edged up 0.3% m-o-m and pushed the y-o-y rate to 1.8%. The reading was slightly better than consensus estimates and provided a much-needed respite for the greenback.

The positive reading, to some extent, got negated by softer headline CPI print at 0.1% in December (0.2% anticipated), with the yearly rate holding steady at 2.1%. Separately, monthly retail sales also missed expectations and posted a growth of 0.3% (0.4% expected).

Technical levels to watch

Any subsequent recovery move now seems to confront resistance near the 111.70 region (200-day SMA), above which a fresh bout of short-covering could lift the pair beyond the 112.00 handle towards its next hurdle near the 112.25-30 band.

On the flip side, the 111.00 handle, closely followed by Nov. 2017 lows near the 110.85 area might continue to defend the immediate downside, which if broken now seems to pave the way for an extension of the pair’s near-term bearish trajectory.