USD/JPY increased sharply today and seems determined to reach fresh new highs in the upcoming hours. It has increased despite the Nikkei’s amazing drop. The USD was boosted the USDX’s rally after the FOMC decision to hike the Federal Funds Rate by 0.25%. USDX is pressuring a strong, dynamic resistance, so only a valid breakout will really signal a further increase in the upcoming period.

The Nikkei’s drop should have pushed the Yen higher, but it seems that the dollar is much stronger despite some poor US figures today.

The Core Durable Goods Orders rose only by 0.1%, less versus the 0.4% estimate, actually, the indicator remained steady at 0.1%, while the Durable Goods Orders increased by 4.5%, beating the 1.9% estimate. The Final GDP remains steady at 4.2%, matching expectations, the Final GDP Price Index increased by 3.0% as expected, while the Goods Trade Balance was reported at -75.8B, much below the -70.6B estimate.

The Unemployment Claims increased from 202K to 214K in the previous week, much above the 208K estimate, while the Prelim Wholesale Inventories increased by 0.8%, beating the 0.3% in the former reading period. Unfortunately, the Pending Home Sales dropped by 1.8%, more versus the 0.2% estimate, but we’ll see what the FED Chair Powell speech will bring tonight.

USD/JPY has managed to jump through the confluence area formed between the inside sliding line (SL) and the 150% Fibonacci line of the descending pitchfork. A valid breakout will accelerate the bullish movement. If this scenario will take shape, then the next upside target will be at the SL1 of the ascending pitchfork.

Right now only a false breakout will signal a potential retreat, but the perspective remains bullish for now and we may see the rate at fresh new highs if the USDX will resume the upside movement.