FxWirePro: USD/JPY slips lower to test 138 handle, focus on BoJ later this week for impetus

Chart - Courtesy Trading View 

USD/JPY was trading 0.16% lower on the day at 138.26 at around 06:20 GMT, slightly above session lows at 138.02.

Mostly downbeat US data and mixed Fedspeak appeared to have cut the hawkish Fed bets of late, dampening the USD.

On the data front last week, US Retail Sales for June grew 1.0% MoM versus 0.8% expected and -0.1% prior (revised from -0.3%).

The University of Michigan's Consumer Confidence Index edged higher to 51.5 in July's flash estimate, versus 49.9 expected and 50.0 prior. 

However, the Index of Consumer Expectations declined to 47.3, its lowest level since May 1980.

Further, the US Industrial Production also fell by 0.2% MoM in June while the New York Empire State Manufacturing Index rose to 11.1 versus -2.0 expected and -1.2 prior.

Apart from mixed data, dovish Fedspeak which dialed back rate hikes from the previous calls of 75 bps weighed on the dollar index.

Atlanta Fed President Raphael Bostic said on Friday that "June's 75 basis points rate hike was a "big move" and added that the Fed wants policy transition to be orderly."

San Francisco Fed President Mary Daly said on Friday that the "Fed is working on getting down inflation without stalling economy."

Major Support Levels: 

S1: 137.96 (5-DMA)

S2: 136.42 (20-DMA)

Major Resistance Levels: 

R1: 139

R2: 139.65 (Trendline)

Summary: USD/JPY hovers around 5-DMA. Major trend is bullish. Break below 200H MA will see more weakness.