Strong still in tact. We had a few tests of New Support/Previous resistance. (121.80 area)
Looking for a clear break of 122.00 to continue the slow rise to 124.00 area.
BOJ states no clear end in sight for easing -
"Strengthening monetary easing too much to push up
in short period will threaten economic, price stability. 2 % target a flexible one"
A like on the chart is appreciated.
1) Japan GDP data came out 1.5% q/q verse 2.2%.
2) Business spending unexpectedly dropped by 0.1%
3) Previous sales tax hike (from 5% to 8%) is causing Japanese firms cut investments.
4) Japan’s economy needs to boost economic activity by more investment, which would lead to better employment and higher wages. This is the only way to boost spending and achieve 2% target in the mid-term.
5) BoJ’s policy outlook can only remain dovish in the absence of other solution. Injection of liquidity is currently not working.
Overall strong data releases is keeping the dollar supported at these levels. The market currently is not worried about risks as the Fed is still on course to hike by June.
Fall in U.S. retail sales gave the market a reason to sell off the dollar. We saw a small dip but it was bought up again.