Daily Forex News and Watchlist: USD/JPY

USD/JPY is pulling back to a key inflection point ahead of a top-tier U.S. data release!

How will today’s headlines affect USD/JPY’s short-term uptrend?

Before moving on, ICYMI, yesterday’s watchlist looked at the 2.0400 area as a potential resistance for GBP/NZD. Be sure to check out if it’s still a good play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

CBI survey showed U.K.’s retail sales index falling from +5 to -10 in May, but outlook is optimistic

U.S. Q1 GDP estimate revised higher from 1.1% to 1.3% on second reading

U.S. initial jobless claims ticked up by 4K to 229K vs. estimates of 245K in the week ending May 20

U.S. pending home sales unchanged (0.0%) in April after a 5.2% drop in March

Reuters reports Biden and McCarthy are “edging close” to a U.S. debt ceiling deal, with the parties just $70B apart on discretionary spending
ANZ-Roy Morgan data showed New Zealand’s consumer confidence dipping slightly from 79.3 to 79.2 in May

Tokyo’s core inflation rose by 3.2% y/y in May, lower than April’s 3.5% gain and the expected 3.3% uptick

Price Action News

Overlay of USD Pairs 15-min

Overlay of USD Pairs 15-min

There were not a lot of market-changing headlines during the Asian session, which is probably why we didn’t see crazy volatility in the last couple of hours.

We did see some profit-taking as more traders stay on the sidelines ahead of the U.S. core PCE price index report as well as the last day this week that U.S. policymakers can agree on a debt ceiling deal.

USD gave up one pip or two against its major counterparts after a short trip higher at the start of the trading session.

U.K.’s retail sales at 6:00 am GMT
U.S. core PCE price index at 12:30 pm GMT
U.S. durable goods orders at 12:30 pm GMT
U.S. personal income and spending at 12:30 pm GMT
U.S. revised UoM consumer sentiment at 2:00 pm GMT

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

USD/JPY 15-minute Forex Chart

USD/JPY 15-minute Forex Chart Chart by TV

If you were watching dollar pairs in general and USD/JPY in particular, then you’ll know that the pair got rejected at the 140.25 minor psychological area.

The pair is now trading closer to 139.80, which isn’t far from the 50% Fibonacci retracement level of yesterday’s upswing.

More importantly, 139.80 is just above today’s Pivot Point level (139.69) and a trend line support that’s been around since earlier this week.

Will USD/JPY extend its gains today?

The pair’s price action will probably depend on the U.S. core PCe price index release. Word around is that we won’t see big changes from last month’s numbers, which could extend this week’s intraweek trends.

A bounce from the current 38.2% Fibonacci pullback levels might make for a good trade especially if USD/JPY makes new weekly highs before the week ends.

If you’d rather short USD against JPY, then you’ll want to do it after the pair breaks below the Pivot Point and trend line support that we’re watching.

Good luck and good trading this one!

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