The US Dollar (USD) inched lower against the Japanese Yen (JPY) on Wednesday, dragging the price of USD/JPY to less than 111.50 following the US consumer confidence news. The technical bias remains bullish because of a higher low in the recent upside move.
Technical Analysis
As of this writing, the pair is being traded around 111.20. A support may be seen near 111.00, the 61.8% fib level + psychological number ahead of 110.85-110.75, the short term horizontal support + 50% fib level and then 110.19, the lower trendline support as demonstrated with brown color in the given below hourly chart. A break and daily closing below the 110.19 support shall incite renewed selling pressure, validating a move towards 109.50 and then 109.20.
On the upside, the pair is expected to face a hurdle near 111.30, the trendline resistance area ahead of 111.46, another trendline resistance as demonstrated with pink color in the above chart and then 111.57, a major horizontal resistance zone. The technical bias shall remain bullish as long as the 110.19 support area is intact.
US Consumer Confidence
U.S. consumer confidence surged to a more than 16-year high in March amid growing labor market optimism while the goods trade deficit narrowed sharply in February, indicating the economy was regaining momentum after faltering at the start of the year. The economy’s strengthening fundamentals were underscored by other data on Tuesday showing further increases in house prices in January. Robust consumer confidence and rising household wealth from the home price gains suggest a recent slowdown in consumer spending, which has hurt growth, is likely temporary.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels can be a good strategy in short to medium term.
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