USD/JPY retreats below 148.00 with US data and Japanese CPI on focus

• The US Dollar is trimming gains with the upside trend intact. 
• US jobless claims and housing data and the Japanese CPI figures are likely to define the pair’s direction.
• USD/JPY support levels at 147.11 and 146.35 are likely to hold bears.

The Japanese Yen is paring some losses on Thursday as the US Dollar and US Treasury yields’ recovery loses steam. The pair is trading below 148.00 after pulling back at 148.50 on Wednesday, although the broader trend remains positive.

The US Dollar is trading moderately lower on Thursday, as the positive impact of the upbeat US Retail Sales eased. Retail consumption increased at a 0.6% pace in December, beating market expectations of a 0.4% increment.

These figures highlight the solid economic momentum of the US economy, echoed by the conclusions of the Beige Book, and are expected to keep US Dollar downside attempts limited.
 

Later today, the US weekly jobless claims and housing data will provide further cues into the US economic outlook. The main focus, however, will be the Japanese CPI, the last key inflation gauge ahead of next week’s BoJ meeting.

Technical indicators remain bullish, although the overbought levels on intra-day charts allow for some downside correction. Support levis at 147.11 and 146.35 are likely to hold bears. Resistances are 148.50 and 149.75.

Technical levels to watch