USD touched 4-month high against major currencies on Wednesday as data showed that USD economy is rock solid so that market expects that the Federal Reserve might raise Fed fund rate before this year ends. US Department of Commerce also showed that US new home sales rose 4.8%, indicating the strength of the economy.
Investors had liquidated their safe haven positions on Japanese yen as anxiety triggered by Brexit eases. In addition, BOJ is expected to conduct another monetary easing in the next meeting in July 28-29. Most economists expect more stimulus from BOJ.
USD/JPY is testing intraday key resistance at 106.706. If the price managed to break the resistance, USD/JPY possibly will continue the upside move to 106.915-107.150. As alternative strategy, watch for bullish signal confirmation on a pull-back move to 106.263 with 106.497 as target and 106.706 in extension.
Be careful if the support at 106.263 breaks because it will turn the intraday bias bearish and possibly will push the price lower to 106.028-105.819.
– Buy on break of 106.706; S/L: 106.600, T/P: 106.915 or 107.150
– Buy on bullish signal conformation on a pull-back to 106.263; S/L: 106.100, T/P: 106/497 or 106.706.