The US Dollar (USD) extended downside movement against the Japanese Yen (JPY) on Friday, dragging the price of USDJPY to less than 122.60 following the release of some key economic news. The technical bias however remains bullish because of a Higher High and Higher Low in the recent wave on daily chart.
Technical Analysis
As of this writing, the pair is being traded around 122.57. A hurdle can be noted near 123.00, the psychological number ahead of 123.74, the swing high of the last major upside rally as demonstrated in the following daily chart.
On the downside, the pair is likely to find a support around 122.10, the 61.8% fib level ahead of 120.95-121.00, the confluence of psychological number as well as 50% fib level. The technical bias will remain bullish as long as the 118.05 support area is intact.
Japan CPI
Earlier during the Asian session, there was a major release in Japan. The National Consumer Price Index, which is a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services was released by the Statistics Bureau. The market was expecting no major increase in the CPI in October 2015, compared with the same month a year ago. However, the outcome was above the expectation, as the CPI rose 0.3%. It rose 0.7% in October 2015, compared with the same month a year ago. The market was expecting a rise of 0.8%.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term.
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