JPY Trading Outlook (15-01-2015)

USD/JPY The decks were stacked against the USD/JPY and EUR/JPY intraday, the former due to a huge downside miss in US Retail Sales, and the latter due to an ECJ opinion that leveled a potential roadblock to ECB QE next week. USD/JPY was already in decline with the N225 & Tsy yield spreads before the Sales data slammed it to a 116.07 session low ahead of good and perhaps PKO bids into 116 and above the Dec N225 futures low of 16,525. A sharp rebound in oil prices and lessening of losses in Tsy yields and stocks helped USD/JPY rebound toward Tuesday’s 117.52 low. Today’s long Candle wick and low above the Dec swing low & 50% Fibo by 115.50 take some of the technical sting out the intraday dive, but the daily tenkan about to cross below the Kijun, with both lines and prices now inside the Cloud, the base of which is at 113.53, equaling the 50% retrace of the Oct-Dec rally. A close above the Cloud top at 118,75 on Thur is needed to undo some of this week’s damage. EUR/JPY fell to 137.02, holding above stops below the figure and the weekly Cloud base at 136.82. Will ECB QE & eased EC fiscal rules be enough to revive EZ growth/CPI prospects?