FXOpen
The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Monday, increasing the price of USDJPY to more than 123.00 following some key economic release on Friday. The technical bias remains bullish because of a Higher High in the ongoing wave.
Technical Analysis
The USD/JPY pair closed last Friday at 122.58, having retraced half of the gains achieved in the NFP Friday, on speculation the Bank of Japan may refrain from extending the monetary stimulus program, at least for the rest of the current fiscal year. Also, soft US macroeconomic data has prevented the greenback from running these last few days, although the confirmation of a technical top remains for now, out of the question.
Technically, the daily chart for the USD/JPY shows that the price is now below the 23.6% retracement of its latest advance, whilst the technical indicators have retraced from overbought level and hold far above their mid-lines, implying limited bearish potential at the time being. In the same chart, the 100 and 200 SMA’s converge with the 61.8% retracement of the same rally at 121.50, becoming a critical support during the upcoming days. In the 4 hours chart, the technical indicators diverge from each other in negative territory, but the price remains well above its moving averages. The 38.2% retracement of the mentioned rally stands at 122.30 the immediate support and the level to break to confirm further declines for this Monday.
US Retail Sales
U.S. retail sales rose less than expected in October amid a surprise decline in automobile purchases, suggesting a slowdown in consumer spending that could temper expectations of a strong pickup in fourth-quarter economic growth.
The Commerce Department said on Friday retail sales edged up 0.1 percent last month after being unchanged in September. Economists had forecast retail sales increasing 0.3 percent in October after a previously reported 0.1 percent increase in September.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around 123.50 level could be a good strategy if we get a valid bearish reversal candle on four-hour timeframe.
Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.
* FXOpen International, Innovative Broker of 2022, according to the IAFT
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Latest from Forex Analysis
Latest articles
US Government Shutdown: Assessing Economic Impact and Recession Risks
The recurring spectre of a government shutdown has once again loomed over the United States, prompting concerns about its potential economic consequences. The shutdown may occur this weekend unless lawmakers agree on spending levels and whether to give more aid
S&P 500 Analysis: Price Reaches The Edge of Abyss
Investors in the US stock market have serious reasons to worry: → The likelihood of a shutdown of government agencies is becoming more and more real. It could happen as early as next week if a budget agreement is not reached
Bitcoin Cash Analysis: Promising Resistance Breakout
Yesterday, the head of the SEC regulator, Gary Gensler, answered questions for 4 hours before the Financial Services Committee of the US House of Representatives, which, among other things, related to cryptocurrencies. What has become known: → on the eve of