The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, increasing the price of USDJPY to more than 103.00 following the release of some key economic news. The technical bias has turned bullish because of a Higher Low in the recent downside move.
Technical Analysis
As of this writing, the pair is being traded near 102.97. A hurdle can be seen around 103.57, the horizontal resistance area ahead of 104.00, the psychological number and then 107.50 in the long run which is the swing high of the last major upside rally.
On the downside, the pair is likely to find support around 101.75, the intraday low of yesterday ahead of 101.20-101.00, the confluence of horizontal support as well as the psychological number as demonstrated in the above daily chart. The technical bias will remain bullish as long as the 99.54 support area is intact.
U.S. Consumer Confidence
U.S. consumer confidence rose to an 11-month high in August, with households more upbeat about the labor market, in a further sign that the economy was regaining steam after faltering in the first half of the year. The Conference Board said its consumer confidence index increased 4.4 points to 101.1 this month, the highest reading since September 2015. Consumers’ assessment of both current business and labor market conditions improved sharply in August. The survey’s so-called labor market differential, derived from data about respondents who think jobs are hard to get and those who think jobs are plentiful, was the most favorable since January 2008. This measure, which closely correlates to the unemployment rate in the Labor Department’s employment report, is pointing to further declines in the jobless rate and labor market slack.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair on dips still appears to be a good strategy in short to medium term.
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