• US Retail Sales rise more than expected in October.
• Quiet session across financial markets on Wednesday.
• USDJPY is marginally higher, moving between 139.00 and 140.00.

The USJPY is hovering around 139.40, marginally higher for the day, following the release of US economic data, on a relatively quiet session. The pair continues to stabilize after sharply moves last week.

Dollar mixed after data

US data come in mixed to positive. Retail Sales in October rose 1.3%, the best reading in eight months. Industrial production dropped 0.1%, against expectations of an increase of 0.2; September numbers were revised lower from 0.4% to 0.1%.

The numbers boosted the US Dollar but only modestly. The DXY remains in negative territory but above 106.00. While the US 2-year bond yield remains steady at 4.36%, the 10-year is at 3.73%, the lowest since October 22. The USDJPY spiked to 140.00 after retail sales but then dropped to as low as 139.03.

In Japan, Machinery Orders tumbled in September unexpectedly 4.6%. “This comes after weaker-than-expected Q3 GDP readings and of course bodes ill for growth going forward.  As such, it’s no surprise that Japan policymakers remain cautious about removing stimulus too soon”, said analysts at Brown Brother Harriman.

Bearish but consolidating

The USDJPY is moving sideways after being able to recover the 138.50 zone. A consolidation below would increase the bearish pressure. On the upside the immediate resistance is seen around 140.00 and then the 140.60 zone. A consolidation above would open the doors for a test of 141.00 and probably more gain.

The ongoing consolidation follows a sharp decline last week that changed the short-term bias from bullish to bearish.

Technical levels