USD/JPY has broken out to a fresh monthly high to start this week’s trade, testing above the resistance portion of an ascending triangle formation that I had discussed on Friday. Ascending triangles are often approached with the aim of bullish breakout and with that now taking place, the next item of interest is the 135.00 psychological level which provided resistance when being tested mid-March.
The Bank of Japan didn’t alter policy last night and a large wave of Yen-weakness appeared; but that’s been faded in most pairs already as markets brace for change from the BoJ, at some point.
JPY trends have remained in-force as the BoJ remains one of the most loose and dovish Central Banks in the world. Will stronger inflation now at 31-year highs compel the BoJ to begin positioning for a change, however subtle it may be?