Technical Analysis: Bearish
Key Takeaways:
- USDJPY rallies as bullish pin bar emerges on hourly chart
- US Durable Goods Data exceeds expectations
- 118.50 remains key support area
The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Monday, increasing the price of USDJPY to more than 118.90 following an unprecedented jump in the US durable goods orders in March. The technical bias however remains bearish in short term due to a Lower Low on hourly timeframe.
Technical Analysis
As of this writing, the pair is being traded near 118.89. A support can be seen around 118.77, the low of the bullish pin bar on hourly chart ahead of 118.52-118-50, the confluence of horizontal support as well as psychological number.
On the upside, the pair is likely to face a hurdle near 119.00-119.07, the 23.6% fib level as well as psychological number ahead of 119.42, the 50% fib level as demonstrated in the above hourly chart. The technical bias will remain bearish in short term as long as the 120.08 resistance area is intact.
Durable Goods Orders
Durable goods orders remained 4% in March as compared to -1.4% in the month before, up beating the average forecast of 0.6% by a long shot. Generally speaking, higher durable goods orders are considered positive for the economy thus a better than expected actual outcome spurred bullish momentum in the price of USDJPY. The same trend is likely to continue today during the Tokyo and London session.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium. The trade should however be stopped out on an hourly closing below the 118.77 support area.
Trade global forex with the best ECN broker of 2021*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about making your money go further with FXOpen.
* FXOpen International, best ECN broker of 2021, according to the IAFT
