USD/JPY sticks to daily gains despite of disappointing US macro data

The USD/JPY pair held on to daily gains near session peaks, albeit has failed to break through mid-111.00s in wake of disappointing US economic data.

According to the data released from the US, durable goods orders recorded 0.7% m-o-m growth during March and core durable goods orders unexpectedly contracted by 0.2%. The readings were well short of consensus estimates but did little to attract any fresh selling pressure around the major. 

Meanwhile, weekly jobless claims also unexpectedly jumped to 257K for the week ended April 21, while goods trade deficit remained unchanged at $64.8 during March and did little to extend any additional support to the strong bid tone surrounding the major.
 
Next on tap would be pending home sales data, which although is unlikely to have a major impact on the pair’s near-term direction but should provide short-term trading opportunities for traders. 

With a slew of disappointing US macro data, it would be interesting to see if the pair is able to hold on to its gains or once again faces some fresh supply at higher level, against the backdrop of fading optimism surrounding the US President Donald Trump’s tax reforms and pro-growth economic policies.

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Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the 4 hours chart shows that the price held above its moving averages, with buying interest aligned around the 200 SMA, currently around 111.00, whilst technical indicators retreated modestly from extreme overbought readings, but are far from turning lower. Still, the pair needs to regain the 112.00 threshold to be able to extend its advance towards the 113.00 region."