Despite the lower results of the US retail sales yesterday, the currency pair remained stable around its recent gains, which reached the resistance level 110.16. Pressure on the Japanese yen is still the strongest in light of the slow Japanese vaccination and the increase in the number of injuries and amid fears that the Olympic event will lead to the collapse of the health system in the country.
US retail sales fell during the month of May, dragged down by lower auto sales and Americans turning to spending more on vacations and other services instead of goods. Sales fell seasonally adjusted - 1.3% in May compared to the previous month. Economists had expected a smaller decline - 0.5%. Economists had expected US retail sales to fall in May due to a shortage of cars available for sale due to a global shortage of chips needed to power car screens and other features. The government said sales at car dealerships fell 3.7% last month.
All in all, US retail sales have been volatile even as the US economy improves, the unemployment rate drops and consumer confidence rises. Retail sales fell at the end of 2020 and in February of this year. Spending rose nearly 11% in March as Americans received and cashed $1,400 stimulus checks. Despite the May drop, retailers were optimistic that rolling out the vaccine would lead to more people in their store aisles. For example, electronics chain Best Buy said it expects a major sales number to rise this year, having previously forecast a decline.
The death toll in the United States of America due to the emerging coronavirus (Covid-19) has exceeded 600,000, as the vaccination campaign reduced daily cases and deaths. This is according to a survey by Johns Hopkins University. The number of lives lost is greater than the population of Baltimore or Milwaukee. It is roughly equal to the number of Americans who died of cancer in 2019.
With the advent of vaccines, daily COVID-19 deaths in the United States have fallen to an average of 340 from more than 3,400 in mid-January. It averages 14,000 cases per day, down from a quarter of a million cases per day during the winter. Worldwide, the confirmed death toll from the coronavirus has reached 3.8 million. Actual totals in the United States and around the world are believed to be much higher, with many cases being ignored or possibly hidden by some countries.
Technical analysis of USD/JPY: On the daily time frame, the price of the USD/JPY currency pair is moving within the range of an ascending channel that will be strengthened if the bulls succeed in moving towards the resistance levels 110.65, 111.20 and 112.00, respectively. On the other hand, the failure of the current rebound will show a head and shoulders formation, which may support a quick sell-off for the currency pair. I still prefer buying the currency pair from every bearish level.
The currency pair will be strongly affected with the announcement of the US Federal Reserve on its monetary policy decisions, the content of the bank's policy statement and the statements of Governor Jerome Powell. Expectations are strong that the bank will keep US interest rates unchanged and will be affected by the content of the statement and statements.
