After a long period of languishing, USD/JPY is breaking out
The key line in the durable goods orders report is capital goods orders non-defense, excluding-aircraft. It rose 1.0% in April compared to 0.3% expected. In addition, the previous month's number was massively revised to +1.5% from 0.5%.
The data shows much stronger business investment than anticipated and will embolden the Fed towards hiking rates.
Technically, the best kind of breakout is one that comes on good news. An optimistic sounding Yellen, plus great news on core orders is a greenlight for USD/JPY longs (and US dollar buying elsewhere). In addition, the long period of consolidation sets up an extended gain.
Ryan wrote about his strategy for USD/JPY earlier.
This is a 'buy and hold' kind of trade.
