The US Dollar (USD) extended downside movement against the Japanese Yen (JPY) on Wednesday, dragging the price of USDJPY to less than 117.50 following the release of some key economic news. The technical bias remains bearish because of a lower high in the recent upside rally.
As of this writing, the pair is being traded around 117.48. A support may be seen near 117.45, the trendline support ahead of 117.00, the psychological number and then 116.50, a key horizontal support area.
On the upside, the pair is expected to face a hurdle near 117.74, the swing high of the last major upside rally on the hourly timeframe as demonstrated in the given above chart. A break and hourly closing above the trendline resistance shall incite renewed buying interest, validating a move towards the 118.70 resistance zone. The technical bias shall remain bearish as long as the 117.74 resistance area is intact.
Japan’s Industrial Production
Industrial production in Japan rose less-than-expected last month, preliminary data showed on Tuesday. In a report, the Ministry of Economy, Trade and Industry said that industrial production rose to a seasonally adjusted 1.5%, from 0.0% in the preceding month. Analysts had expected industrial production to rise 1.6% last month.
Japan’s Retail Sales
Japanese retail sales rose more-than-expected last month, official data showed on Tuesday. In a report, the Ministry of Economy Trade and Industry said that retail sales rose to a seasonally adjusted annual rate of 1.7%, from -0.1% in the preceding month. Analysts had expected retail sales to rise at annual rate of to 0.9% last month.
Considering the overall technical and fundamental outlook, selling the pair on a breakout through the lower channel support appears to be a good strategy in short to medium term.
* FXOpen International, best ECN broker of 2021, according to the IAFT