Who’s ready to trade the U.S. retail sales report?
If you’re feeling bullish on the dollar, you might wanna see this simple uptrend play on USD/JPY.
Before moving on, ICYMI, yesterday’s watchlist looked at USD/CAD’s major resistance test ahead of the U.S. PPI release . Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. headline PPI advanced from 0.8% to 1.1% in June
U.S. core producer price inflation slowed from 0.5% to 0.4%Fed officials Waller and Bullard leaning towards 0.75% hike vs. 1.00% increase
FOMC official Waller: You don’t want to overdo rate hikes
U.S. initial jobless claims at 244K vs. 235K forecast
BusinessNZ manufacturing index fell from 52.6 to 49.7
PBoC kept interest rates unchanged
Chinese economy grew by measly 0.4% in Q2 vs. projected 1.2% growth, 4.8% previous
China’s retail sales rebounded by 3.1% y/y after previous 6.7% decline
Chinese industrial production accelerated from 0.7% to 3.9% y/y
Japanese tertiary industry activity rose from 0.7% to 0.8% vs. 0.5% consensus
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. headline and core retail sales at 12:30 pm GMT
Empire State manufacturing index at 12:30 pm GMT
FOMC member Bullard’s speech at 1:00 pm GMT
U.S. preliminary UoM consumer sentiment index at 2:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: USD/JPY
USD/JPY 1-hour Forex Chart
If you’ve been wanting to hop in the USD/JPY uptrend for quite some time, then this might be your chance!
The pair has formed higher lows connected by a rising trend line that’s been holding all month, and it looks like another test of support is in the works.
Will dollar bulls continue to defend the floor?
This might all boil down to the outcome of the U.S. retail sales report, which would likely impact overall market sentiment and Fed rate hike bets.Analysts are expecting to see a 0.9% rebound in headline consumer spending after the earlier 0.3% decline. Meanwhile, core retail sales could tick higher from 0.5% to 0.7% in July.
Stronger than expected data could ease fears of a recession in the U.S. while also lifting hopes for a 0.75-1.00% rate hike later this month – both bullish scenarios for the scrilla!
So where might buyers be lookin’ to join in?
The Fibonacci retracement tool shows some options, with the 50% to 61.8% levels spanning an area of interest near the rising trend line. The 61.8% Fib is even in line with the 100 SMA dynamic inflection point, adding to its strength as support.
Technical indicators also point to a continuation of the uptrend, as the 100 SMA is above the 200 SMA while Stochastic is already on the move up. These confirm that bullish momentum is in play and might be enough to take USD/JPY to the swing high and beyond.
Just make sure you set your stop losses properly when trading during a top-tier news event!
