The USD/JPY is consolidating above its psychological 90 level after Friday's wild fluctuations in the wake of U.S. consumption data. Although the USD/JPY popped after stronger than expected Retail Sales figures, the currency pair's upward momentum was stifled by a disappointing UoM Consumer Sentiment figure. However, the USD/JPY has managed to avoid a retest of 90 in the process and its upward momentum stemming from March lows is still intact. The USD/JPY peaked above our 3rd tier downtrend line on Friday, a development worth mentioning since it runs through 2/22 highs, or the 91.70 level. Hence, the USD/JPY could be in for more near-term gains should U.S. economic data print favorably. Since the BoJ has been more dovish than the Fed, positive U.S. data benefits the USD/JPY due to speculation that the Fed will tighten before the BoJ. That being said, there's an FOMC meeting on Tuesday and it will be interesting to see whether the central bank makes any adjustments to its monetary policy language. If the Fed should exert a more hawkish stance this could also benefit the USD/JPY. Meanwhile, the U.S. will release a data set today, including the Empire Index, Industrial Production, TIC Long-Term Purchases and the Capacity Utilization Rate. Hence, volatility could pick up as the trading session progresses.
Technically speaking, the USD/JPY faces our new downtrend lines along with 3/12 and 2/17 highs. Meanwhile, the highly psychological 90 area could have an influence over the USD/JPY's movements for the near-term. As for the downside, the USD/JPY has multiple uptrend lines serving as technical cushions along with 3/15 and 3/9 lows.
Present Price: 90.68
Resistances: 90.69, 90.81, 90.89, 90.95, 91.04, 91.11
Supports: 90.61, 90.54, 90.45, 90.35, 90.29, 90.17
Psychological: 90, March highs