USD/JPY retreats after Consumer Sentiment data

On Friday, the USD/JPY fluctuated once again below 149.00 as risk appetite stabilized. To close the trading week, there is selling pressure on the US dollar everywhere. Next week will bring Jackson Hole and national inflation data from Japan.

Friday saw a slight decline in USD/JPY, with a morning drop below 149.00 and a test close to the 148.00 handle. As broad market sentiment improves as a result of an increase in US consumer confidence data, the US dollar is being sold off everywhere.

The University of Michigan’s Consumer Sentiment Index, which rose to 67.8 from 66.4 to a comfortably higher level than predicted in August, revealed a stronger-than-anticipated rebound in the outlook of questioned consumers.

Despite the UoM 5-year Consumer Inflation Expectations in August remaining stable at 3% and a slight decline in the UoM Consumer Current Conditions outlook, which eased to 60.9 from 62.7, completely reversing direction on the forecast 63.1, investors grabbed hold of the headline print and piled back into riskier assets while selling the dollar.

The data calendar for the coming week is expected to be quiet. The Japanese National Consumer Price Index (CPI) inflation figures will be the Yen’s important print, while US traders’ attention will be drawn to the opening of the Jackson Hole economic symposium later in the week.

USD/JPY Price Expectations

The pair has fallen back below a rising trendline on daily candlesticks as a result of Friday’s collapse in USD/JPY bids, but as buyers take a break, price action is still heading into the upper end.

The USD/JPY pair is still trading close to 151.67 on the south side of the 200-day Exponential Moving Average (EMA). If bullish pressure breaks out at the wrong time, another short-side technical leg may form as intraday bids attempt to break through technical levels below 149.00.