USDJPY Looks Set For Bullish Reversal

Technical Bias: Bullish

Key Takeaways:

• USDJPY finds support near 118.50-118.00 zone
• US Consumer Confidence remains well above expectations
• Buyers wait for bullish signs

The US Dollar (USD) kept falling against the Japanese Yen (JPY) counterpart on Monday, dragging the price of USDJPY to less that even 119.00 as markets reopen. The technical bias remains bullish due to a Higher High on daily chart.

Technical Analysis

As of this writing the pair is being traded near 118.93. A support may be noted around 118.56, the low of last week ahead of 118.32, the low of the last major dip as demonstrated in the following chart. A break and daily closing below the 118.00 support area could incite renewed selling interest, validating a plunge towards the 115.00 handle.

On the upside, the pair is expected to face a hurdle near 119.66, the 32.8% fib level ahead of 120.84, high of the last major rally. Technical bias will remain bullish as long as the 118.32 support area is intact.

US Consumer Confidence

The consumer confidence in the United States jumped broadly to 95.9 points in April as compared to 93.0 points in the month before, up beating the average forecast of 94.0 points by a long shot. Generally speaking, higher consumer confidence is considered positive for the economy thus  a better than expected actual outcome might spur bullish momentum in the price of USDJPY.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around the current levels appears to be a good strategy in short to medium term if we get a bullish pin bar or bullish engulfing candle today.

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