USD/JPY: Upbeat US Retail Sales figures to weigh on the yen

USD/JPY is stuck around the 23.6% retracement of its latest daily slump, just above 107.25, after the Bank of Japan expanded its support program to 110 trillion yen. Positive US Retail Sales data would hurt the yen, FXStreet’s Chief Analyst Valeria Bednarik briefs. 

See:

US Retail Sales Preview: Five major banks expectations for May report

US Retail Sales Preview: The greater, the best for equities and USD

Key quotes 

“The BoJ had a monetary policy meeting, yet, as expected, rates were left unchanged. ‘Interest rates are not likely to be raised in fiscal 2021 or fiscal 2022,’ said Governor Kuroda. Policymakers decided to further boost its support program to 110 trillion yen.” 

“The US session will bring May Retail Sales, foreseen bouncing from -16.4% to 8%. The core reading, Retail Sales Control Group, is expected at 4.7% from -15.3%. Given the positive tone of equities, a better-than-expected reading could send them further up, and weigh on the safe-haven yen.”

“The 4-hour chart shows that the bullish potential remains well limited. Technical indicators have turned south, although they are currently within neutral levels, while the price is unable to advance beyond a flat 200 SMA.” 

“The main resistance comes at 107.80, where the pair has the 38.2% retracement of the mentioned decline. The bearish case will be firmer on a break below 106.95, the immediate support.”