The final tier-one data of the week is due over today’s US sessions with the US Retail Sales for December due.
Following the lackluster response to stronger-than-expected CPI for December, it seems that the odds are stacked against a bullish reversal in USD.
With this in mind, should data print at or below consensus today, we will likely see an acceleration in USD selling, further clearing out the order books.
While this move might well prove to be a short-term correction lower, for now, the momentum is with sellers, so we go with the flow.
USD/JPY - Technical Outlook
Reports that the BOJ has started discussing the logistics of rate hikes have caught the market offside a little, sparking some JPY bullishness.
Given the current USD weakness, this makes USD/JPY a strong candidate for further sales should USD move lower after today’s data.
The break of the local trend line and the 114.70 level firmly focuses on the move down to the 112.72 level next, allowing bears to stay short while the price holds below 114.70.