On its 4-hour time frame, USD/JPY is showing enough forex trading upside momentum after bouncing off the bottom of the rising channel. The pair has formed short-term double bottoms and is moving on to making a larger set on the same forex trading time frame.
With that, USD/JPY’s next rally resistance appears to be located at the 103.00 major psychological level, which might also serve as the neckline for the double bottom on the 4-hour chart. A break above this area of interest could mean a move up to the 104.00 major psychological resistance, which is at the top of the ascending channel.
USD/JPY Forex Trading Outlook
The US economy is set to print its retail sales data in today’s New York trading session. Market watchers are expecting to see a 0.6% gain in headline consumer spending and a 0.5% increase in core retail sales, both slightly slower gains compared to the previous month’s figures.
Take note though that the US economy has shown stronger than expected jobs gains in April, which could increase the odds of seeing higher than expected increases in retail sales. As for Japan, there have been a few weak spots in the economy and the recently implemented sales tax hike could weigh on growth later on.
The Fed is on track with its taper plan, eventually looking to hike interest rates once clearer signs of growth are seen. The BOJ, on the other hand, is more inclined to ease given their ongoing battle with deflation and potentially weak spending. With that, the path of least resistance for this forex trading pair is to the upside, in line with the trend channel that is holding.
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