The USD/JPY pair accelerated its growth after ending its temporary retreat. It's traded at 129.86 at the time of writing far above 126.94 yesterday's low. It has registered a 2.33% growth from yesterday's low to today's high of 129.90.
Fundamentally, the US data came in worse than expected but the Dollar Index resumed its growth as the Federal Reserve is expected to continue hiking rates. As long as the DXY grows, the greenback could resume its appreciation versus the other currencies.
On the other hand, the BOJ left its monetary policy unchanged in the April meeting weakening the JPY. Actually, the Yen started to drop ahead of this high-impact event. The BOJ Policy Rate remained at -0.10% as expected. The Japanese Housing Starts and the Retail Sales came in better than expected but the Yen could lose more ground if the Japanese Yen Futures drop.
USD/JPY Lifted By DXY!
As you can see on the H4 chart, the pair was in a corrective phase. Failing to stay below the 23.6% (127.48) signaled that the retreat is over. In the short term, it has developed a down channel pattern which represents an upside continuation formation.
The aggressive breakout through the channel's resistance and above the 129.40 signaled strong buyers and further growth ahead.
USD/JPY Outlook!
The current breakout above the 129.40 previous high may signal potential further growth towards new highs. Testing and retesting this level or consolidation above it could bring new buying opportunities with potential targets at 130.50 and at 131.00.
