USD/JPY sub 100.00 on European open

FXstreet.com (London) - USD/JPY suffered on the back of poor US Retail Sales. The US dollar will continue to be subject to, and probably quite volatile, around the performance of the US economy while Bernanke keeps markets on the edge of their seats in relation the subsequent risks to global markets around the subject of tapering QE. For Japan, this week we will see BoJ Monetary Policy Meeting Minutes on Wednesday 17th July. But key we will hear Bernanke’s semi-annual testimony to US Congress tomorrow. The low level of inflation that many participants are concerned about will likely be addressed in relation to timings of tapering, as coupled with a high level of unemployment there may be signals that in fact more stimulus is needed, so quite the opposite to current sentiment. US CPI is also in the cards coming up today as the major risk event. Data is for June and the consensus is for an increase to 1.6% y/y from 1.4% in May.

USD/JPY with a downside bias

Karen Jones, Chief analyst at Commerzbank noted that in USD/JPY, despite yesterdays rally, the market remains below its 101.60 78.6% retracement and attention remains on the base of the cloud circa 98.15. “It starts this week sandwiched between these two levels. We suspect that overall risk is on the downside. Should the base of the cloud be eroded, it will leave the market under pressure and likely to slide back to 96.75/95.40 en route to the 93.75 recent low”.