COZforex: The dollar rise to more than 1 week highs against the yen on Friday as upbeat data on US new home sales added to signs of a recovery in the housing market.

USD/JPY was up 0.25% to 101.96 late Friday, recovering from the 3 1/2 month trough of 100.81 struck on Wednesday. The pair ended the week with gains of 0.49%. COZforex senior currency strategist Ian • Quigley said, USD/JPY is predicted to find support at 101.52, and a drop through could take it to the next support line of 101.26. Meanwhile, the pair is predicted to find its first resistance at 101.96, and a rise through could take it to the next resistance line of 102.13.

The dollar was boosted after the Commerce Department reported that sales of new homes rise by a larger-than-expected 6.4% to 433,000 in April, after 2 months of decline. Analysts had been expecting a figure of 425,000. March's number was revised up from 384,000 to 407,000.

The dollar declined to 3 1/2 month lows against the yen on Wednesday as expectations for more stimulus by the Bank of Japan diminished, while drop in US Treasury yields also pressured the dollar lower.

At the conclusion of its two-day policy meeting, the BoJ said its stimulus program has been working as intended and that the economy is showing signs of weathering the impact of a sales tax increase that came into effect on April 1.

Meanwhile, Wednesday’s minutes of the Federal Reserve’s April meeting indicated that the bank continues to see a slow improvement in the economy, but reiterated that rates are likely to remain on hold at record lows for some time after its asset purchase program ends.


(COZ forex UK)