USD/JPY refreshes monthly highs as DXY tests 99

Following a retracement to 111.10 level, the USD/JPY pair picked up some bullish momentum and touched its highest level since March 31 at 111.73 as the greenback began to gain strength against its competitors. As of writing, the pair was up 0.5%, trading at 111.65.

Today's price action has been mostly dominated by technical movements as the economic calendar hasn't offered any fundamental news that could potentially bring some volatility to the market. The US Dollar Index finally peaked above the 99 level following a few unsuccessful attempts during the day and renewed its daily high at 99.05, providing an additional boost to the USD/JPY pair

The risk appetite has been pretty apparent during the first half of the week and helped the pair to gain more than 200 pips since last week's closing. Although European stock indexes seem to have lost some of their recent bullish strength on Wednesday, the major equity indexes in the U.S. could extend their earnings as the big corporations continue to report positive Q1 earnings. Later in the day, Donald Trump will be announcing his new tax plan, which could shape the market sentiment and be a catalyst for the USD/JPY pair.

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Technical outlook

The pair could face the initial hurdle at 112 (psychological level) ahead of 112.85 (100-DMA) and 113.50 (Mar. 17 high). On the downside, a break below 111.10 (daily low) could aim for 110.35 (Apr. 5 low) and 110 (psychological level/200-DMA). 

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