Retail Sales Surge Higher in January
US retail sales yesterday confirmed the health of the US economy over January. On the back of a bumper set of US labour reports and stronger-than-expected CPI, there was plenty of attention on yesterday’s retail sales release. The report showed that consumer activity jumped 3.8%, up from -2.5% in December and well above the 2.1% forecasted. Similarly, core retail sales also rose by 3.3%, up from -2.8% the prior month and above the 1% forecasted.
In light of this latest data, USD has remained buoyant. The market is widely expecting the Fed to lift rates by 0.25% in March and the focus now will be on the latest set of guidance and projections. USD bulls are looking for the Fed to upgrade its forecasts, particularly the dot-plot projections, to reflect a more aggressive tightening path this year. If confirmed, this will be firmly bullish for USD near term.
Technical Views
USDJPY
The grind higher in USDJPY has lost a lot of momentum recently. With the 116.07 level holding as resistance, risks of a correction lower are growing. However, with MACD and RSI turning higher, we might see one final push higher, looking for a topside break of the 116.07 level, looking for a move up to 117.02 initially. However, if the current correction continues, a break of 114.70 will open the way for a deeper test of 112.72 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.