The pair is showing signs of potentially basing around 138, but after Fed Waller's recent comments, direction from here could come down to the US housing market data released in the coming days.
Friday's hot retail sales print means that a 100bps hike from the Fed hasn't been fully ruled out yet, and further signs of economic resilience from this week's data could help USD/JPY begin another move higher on increased speculation of a more aggressive tightening cycle.
Of course, all trading carries risk, and the pair could see sideways price action or deeper pullback below 138 if the housing data indicates a significant slowdown. Either way, it should be interesting to see how this develops ahead of the FOMC Meeting.
Friday's hot retail sales print means that a 100bps hike from the Fed hasn't been fully ruled out yet, and further signs of economic resilience from this week's data could help USD/JPY begin another move higher on increased speculation of a more aggressive tightening cycle.
Of course, all trading carries risk, and the pair could see sideways price action or deeper pullback below 138 if the housing data indicates a significant slowdown. Either way, it should be interesting to see how this develops ahead of the FOMC Meeting.