USD/JPY: consolidates ahead for key data events this week, Tenkan line needs to break

• USD/JPY: bulls can't get off the floor in Tokyo, with 109.40 Tenkan a barrier.
• USD/JPY: leaning bullish on the 4hr sticks while Japanese and US data comes to the fore.

USD/JPY has been offered in Tokyo's open as the pair consolidates around the Tenkan line at 109.40, capped by the hourly 21 and 100 SMAs converging. All eyes on Japanese GDP and US retail sales. Currently, USD/JPY is trading at 109.25, with a high of 109.41 and a low of 109.25.

USD/JPY has been trading in all too familiar ranges of late, unable to break through the 100 territories and bearish attempts have been picked up by bargain hunters since the US CPI disappointment last week. 

Stocks have continued to perform and have underpinned the upside, despite various geopolitical developments that have so far not phased investors appetite for risk with impressive earnings all around. 

The week ahead and key risks

The week ahead: all eyes on US retail sales - Nomura

The divergence between the two Central Banks remains in play and this week's US retail sales and Japanese GDP are the key events o the calendar that could elaborate such a theme and underpin the upside. Retail sales would need to be a big miss to derail the sentiment for at least three rate hikes in 2018 from the Fed. An ear will also be kept to the gorund for continued progress/developments in respect to Iran, N.Korea and US trade relations with the EU and China.

USD/JPY levels

USDJPY: A cautious stance is required

Valeria Bednarik, chief analyst at FXStreet explained that the pair is developing above a daily ascendant trend-line, also above a still bearish 100 DMA:

"The Momentum indicator in the mentioned chart has pulled down sharply and aims to cross its mid-line into bearish territory, while the RSI consolidates around 60, rather reflecting decreasing buying interest than suggesting an upcoming slide. In the 4 hours chart, the pair held above bullish 100 and 200 SMA, while technical indicators lost downward strength after breaking below their midlines, not enough to confirm an upcoming decline, dependent of a break of the mentioned 108.80 level," Valeria explained.