USD/JPY: awaiting US GDP and consolidates on 111 handle

Currently, USD/JPY is trading at 111.24, up 0.17% on the day, having posted a daily high at 111.61 and low at 111.02.

USD/JPY has been sold off below the rising support of the near-term bullish channel from 111.20 to 111.50 that bears took higher to 111.60 before supply wiped the trade clean back to test the 111.00 psychological level. There has been a cluster trade around 111.10/30 as the market consolidates awaiting fresh impetus from tomorrow's US GDP data. 

Today's data was mixed and nothing too significant came from durable goods or homes data. Most of the business was done overnight on the back of the BoJ. The BOJ lifted its GDP forecast for the fiscal year to 1.6% from 1.5% and for FY18 to 1.3% from 1.1% and still seems (unreasonably) optimistic on inflation. It lowered its 1.5% forecast to 1.4% this year while leaving the FY18 forecast unchanged at 1.7% vs the initial forecast for FY19 is 1.9%.

• US Durable Goods Orders: Lower than expected in March, recovery in business spending intact - Wells Fargo
• US Pending Home Sales: Despite March’s decline, index remains at a solid level - Wells Fargo
• US Dollar Index finds resistance again at 99.15/20

Next major risk:

Is the United State economy in good shape? GDP LIVE Coverage and Forex analysis

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that technically, the 4 hours chart maintains a neutral-to-bullish stance. "The RSI indicator holds flat around 67, while the Momentum heads modestly lower near overbought readings. Additionally, the price continues developing above its 100 and 200 SMAs, with the largest acting as an immediate support an 110.95, the level to break to confirm a bearish extension, whilst only above 112.00 the bullish trend will continue developing."