FxWirePro: USD/JPY Daily Outlook

Chart - Courtesy Trading View 

Spot Analysis:

USD/JPY was trading largely unchanged at 132.83 at around 06:30 GMT, bias remains neutral.

Previous Week's High/ Low: 137.47/ 130.56

Previous Session's High/ Low: 133.19/ 132.30

Fundamental Overview:

Japanese retail sales grew 2.6% YoY in November, missing median forecast of 3.7%. The pace of annual growth in sales slowed from 4.4% in October and 4.8% in September.

On a seasonally adjusted basis, retail sales slipped 1.1% in November from the previous month, down for the first time in five months.

Separate data showed Japan's jobless rate fell to 2.5% in November, in line with a forecasts and down from 2.6% in October.

The jobs-to-applicants ratio was at 1.35, unchanged from October and holding at the highest level since March 2020.

US Core Personal Consumption Expenditures (PCE) Price Index matched 4.7% YoY forecasts for November versus 5.0% prior. 

Further, the Durable Goods Orders for the said month marked a contraction of 2.1% compared to -0.6% expected and 0.7% previous readings. 

The Nondefense Capital Goods Orders ex Aircraft marked improvement of 0.2% compared to 0.0% expected and 0.3% revised down prior. 

Additionally, the Federal Reserve (Fed) Bank of Atlanta’s GDPNow tracker rose to show +3.7% annualized growth for the fourth quarter (Q4) versus +2.7% previous estimates.

Technical Analysis:

- GMMA indicator shows major and minor trend are bearish

- Price action is consolidating break below 200-DMA

- MACD and ADX support downside in the pair

- Momentum is bearish, volatility is high and rising

Major Support and Resistance Levels:

Support - 131.22 (Lower BB), Resistance - 139.42 (20-DMA)

Summary: USD/JPY trades with a neutral bias. Softer US data weighs on greenback and dents upside. Technicals support downside in the pair. Bearish invalidation only above 200-DMA.