The U.S. Dollar (USD) inched higher against the Japanese Yen (JPY) last week, increasing the price of the USDJPY pair to more than 105.00, ahead of the release of the U.S. Retail Sales news. The technical bias remains bearish because the pair printed a lower low in the recent downside move.
Technical Analysis
As of this writing, the USDJPY pair strengthens around 105.55. The price of the pair might find some resistance near the given below price levels.
Short-Term Resistance
106.76 – the major horizontal resistance
107.54 – the high of July 19, 2020
108.09 – the Fibonacci retracement (61.8%)
On the downside, the USDJPY pair is likely to sustain near the listed price tags.
Short-Term Support
103.85 – the confluence of a major horizontal support level and a trendline support
102.76 – the lower trendline arm
102.00 – the psychological number
U.S. Retail Sales News
The U.S. Census Bureau anticipates releasing Retail Sales data on Wednesday (February 17, 2021). According to economists’ view, the U.S Retail Sales news registered a reading of 0.7% in January 2021, as compared to the reading of -0.7%, in the month before.
The U.S. Retail Sales figure reflects net sales made by the retail sector of the United States. The net receipts of sales are presented in percentage. Changes in the percentage of such sales show the performance of retails stores over the given time.
The U.S. Retail Sales data is considered an important economic indicator of consumer spending because it estimates whether or not people are willing to spend more money in the coming days. Generally speaking, a higher reading suggests a bullish market for USDJPY, and vice versa.
Conclusion
Given the macro-economic outlook of the pair, here is the short-term trading plan for USDJPY:
Buy USDJPY @ 105.50
Stop Loss @ 104.50
Take Profit @ 107.00