• US dollar gains momentum after US retail sales data.
• Data comes in below expectations but triggers dollar’s correction.
• USD/JPY bounces almost a hundred pips.

The USD/JPY rose sharply after the release of US economic data and climbed to 133.18, hitting a fresh daily high. The Greenback appreciated across the board despite a larger-than-expected slide in March Retail Sales.

US data below expectations

Retail Sales drooped 1% in March, against the consensus of a 0.4% slide; following a 0.2% decline (revised from -0.4%) in February. Sales excluding autos fell by 0.8% in March, more than the decline expected of 0.3%.

The Import Price Index fell at an annualized rate of 4.6%, more than the 3.7% of market consensus, and the Export Price Index fell by 4.8%, more than the 4.2% slide expected.

The latest economic figures suggest some weakness in demand and also diminishing inflation pressures. However, the immediate reaction following US Retail Sales triggered a bullish correction of the US Dollar across the board. US yields rose sharply, probably amid expectations of even weaker-than-expected figures. Wall Street futures remain in positive ground. The Japanese Yen printed fresh lows versus its main rivals. 

The USD/JPY initially dropped to 132.17 and then bounced almost a hundred pips in a few minutes. It is trading at 133.10, at daily highs. The next resistance level is seen on Thursday’s high at 133.40. On the flip side, now 132.80 is the immediate support. 

Technical levels