USDJPY In Sell Mode Again

Helen Rush
Helen Rush
Senior Analyst – Capital Markets •

Now we know that Janet Yellen was even too hawkish during her testimony in Congress. Recent retail sales and CPI data painted an ugly picture.

Now we know that Janet Yellen was even too hawkish during her testimony in Congress. Recent retail sales and CPI data painted an ugly picture.

Consumer inflation disappointed for the 4th month in a row – in June it stayed unchanged mom vs expectations of a tiny 0.1% rise. Moreover, core CPI slumped to 1.7% yoy hitting the lowest level since the start of 2015.

Meanwhile, June retail sales significantly missed expectations showing -0.2% vs. +0.2% forecast. And the core retail sales excluding auto/gas reflected the lowest annual increase since February 2014.

What does it mean? It means that market expectations on the Fed’s rate hike were exaggerated, and it’s time to correct it selling USD. The most impressive moves may show USD/JPY.

It has already lost almost 100 pips, hitting 4-day low at 112.26. If the pair manages to break below 112.30, the next target is at 111.70.

Disclaimer: This and other personal blog posts are not reviewed, monitored or endorsed by TalkMarkets. The content is solely the view of the author and TalkMarkets is not responsible for the content of this post in any way. Our curated content which is handpicked by our editorial team may be viewed here.

Comments

Back to TalkMarkets