The USD/JPY pair attracts some dip-buying in the vicinity of the 133.55 region during the early North American session and recovers its early lost ground to the weekly low. Spot prices touch a fresh daily peak, around the 134.30 region, and for now, seem to have stalled this week's retracement slide from the highest level since mid-March. However, USD pulled back directly to a low of 134.00. The pullback in USD could extend but a break of the strong support level at 133.50 is unlikely. On the upside, a breach of 134.75 (minor resistance is at 134.40) would indicate that USD is not weakening further.

 As highlighted, the bias is still towards a higher USD. The next level to aim for is a 135.75. Overall, only a break of 133.50 (no change in ‘strong support’ level) would indicate that the USD strength that started on Monday (17 Apr, spot at 133.80) has run its course

A combination of factors provides a goodish lift to the Japanese Yen (JPY), which, in turn, drags the USD/JPY pair away from a multi-week high, around the 135.10-135.15 region touched on Wednesday. According to the data released earlier this Friday, Japan’s National Consumer Price Index (CPI) ticked down to a 3.2% YoY rate in March from 3.3% previous. This, however, was well above the 2.6% estimated and the Bank of Japan’s target range. Furthermore, the Core CPI, which excludes volatile oil and food prices, accelerated to a 3.8% YoY rate from 3.5% in February, surpassing expectations for a reading of 3.4%. This, in turn, indicates broadening price pressure in the world's third-largest economy and keeps alive expectations that the BoJ could begin to phase out its massive stimulus programme later this year.

USDJPY is bullish above the lower TL of channel

Apr 23 2023