CPI and retail sales disappoint
The USDJPY (and USD in general) is lower after the weaker data out the US this morning.
Looking at the USDJPY, the pair moved below a floor area defined by swing lows/high going back to June 29th at 112.815-93 (yellow area in the chart above), and the 100 bar MA on the 4-hour chart at the 112.757. The 38.2% retracement of the move up from the June 14 low comes in at 112.311 and is being tested as I type. There could be a cause for pause after the sharp move but with stops on a break and likely a modest upside bounce.
I would expect sellers against the 38.2%-50% of the move lower off the data (see yellow area on the 5-minute chart below). The data was sufficiently weak to expect the potential for a trend like move. So far, the corrections since the data have been very modest.
If momentum continues lower, traders will be starting to eye a strong support where the 100 and 200 day MA converges with the 50% retracement. That area comes in at 111.64-77. We are still a bit away's from that of course. The 112.00 will be another natural level of support.
PS less than 50% chance of another Fed hike by the end of year.