Dismal US advance retail sales print at a time when markets have a tough time believing the Fed could raise rates even on strong data and the resulting drop in the JPY crosses - AUD/JPY, EUR/JPY, GBP/JPY - indicates Yen demand is likely to spike over the next week.
(Note - Usually a weak US data and a drop in Fed rate hike bets results in risk-on reaction i.e. rise in JPY crosses.)
Hence, a retreat and daily close below 100.71 (50% of 2011 low – 2015 high) appears likely, in which case the pair could see a quick drop to 100.00 levels. On the daily chart, a key trend line support comes around 98.60 levels.
On the higher side, only the day end close above 102.65 (Aug 8 high) would signal short-term bearish invalidation.
(Note - Usually a weak US data and a drop in Fed rate hike bets results in risk-on reaction i.e. rise in JPY crosses.)
Hence, a retreat and daily close below 100.71 (50% of 2011 low – 2015 high) appears likely, in which case the pair could see a quick drop to 100.00 levels. On the daily chart, a key trend line support comes around 98.60 levels.
On the higher side, only the day end close above 102.65 (Aug 8 high) would signal short-term bearish invalidation.
