USD/JPY recovers 80 pips after US GDP report – 27 April 2023
27 Apr 2023
After the release of the US GDP report, the USD/JPY soars to a new daily high of 135.00.
FUNDAMENTAL OVERVIEW
- After the Advance US Q1 GDP report was released, USD/JPY saw strong bids.
- At the beginning of 2023, US economic growth slowed from 2.6% to 1.1%.
- Traders are looking for new energy in the BoJ meeting and the US Core PCE Price Index.
Following the release of the US GDP report, the USD/JPY pair recovers more than 80 pip from the daily low hit during the early North American session and moved up to the 134.00 level, a new daily high.
This Thursday, the US Bureau of Economic Analysis revealed that between January and March, the economy’s growth slowed from a 2.6% annualized pace to 1.1%, falling short of forecasts for a reading of 2.0%. However, the price index’s core measure of personal consumption expenditure increased by 4.9% over the reporting period, exceeding expectations, indicating a rise in price pressures and supported predictions for a further 25 basis point increase at the next FOMC meeting in May. This continues to be favorable for an increase in US Treasury bond yields, which benefits the US Dollar (USD) and the USD/JPY pair by acting as a tailwind.
A goodish recovery in the global risk mood, which tends to undercut the safe-haven Japanese Yen (JPY), may possibly be to blame for the abrupt intraday spike. The dovish stance of the Bank of Japan (BoJ) is also thought to be hurting the JPY and causing the trend up. But it’s still unclear whether the USD/JPY pair will be able to profit from the development or if bulls will decide to stay on the sidelines ahead of Friday’s critical BoJ policy meeting. In addition, the US Core PCE Price Index, the Fed’s preferred inflation indicator, will have a significant impact on the USD and aid investors in predicting the major’s short-term direction.
USD/JPY TECHNICAL ANALYSIS DAILY CHART:
Technical Overview
USD/JPY is currently trading in the up channel.
USD/JPY is currently trading above all SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
USD/JPY resistance is at 133.897 & its immediate support level is 133
HOW TO TRADE USD/JPY
The USD/JPY is forming higher highs and trading in an upward channel. Price is currently trading at a resistance level; if it breaks through this level and holds, an additional upside is expected.