Retail Sales Surge Higher in January US retail sales yesterday confirmed the health of the US economy over January. On the back of a bumper set of US labour reports and stronger-than-expected CPI, there was plenty of attention on yesterday’s retail sales release. The report showed that consumer activity jumped 3.8%, up from -2.5% in December and well above the 2.1% forecasted. Similarly, core retail sales also rose by 3.3%, up from -2.8% the prior month and above the 1% forecasted.In light of this latest data, USD has remained buoyant. The market is widely expecting the Fed to lift rates by 0.25% in March and the focus now will be on the latest set of guidance and projections. USD bulls are looking for the Fed to upgrade its forecasts, particularly the dot-plot projections, to reflect a more aggressive tightening path this year. If confirmed, this will be firmly bullish for USD near term.Technical ViewsUSDJPYThe grind higher in USDJPY has lost a lot of momentum recently. With the 116.07 level holding as resistance, risks of a correction lower are growing. However, with MACD and RSI turning higher, we might see one final push higher, looking for a topside break of the 116.07 level, looking for a move up to 117.02 initially. However, if the current correction continues, a break of 114.70 will open the way for a deeper test of 112.72 next.
Source: Tickmill
