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The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, increasing the price of USDJPY to more than 123.06 following the release of some key economic data. The technical bias already remains bullish because of a Higher High and Higher Low in the recent wave.
Technical Analysis
As of this writing, the pair is being traded around 123.04. A hurdle can be noted near 123.52, the 76.4% fib level ahead of 123.74, the swing high of the last major upside rally and then 124.00, the psychological number.
On the downside, the pair is likely to find a support near 122.63, the swing low of yesterday ahead of 122.10, the 61.8% fib level and then 120.95-121.00, the 50% fib level as well as psychological number as demonstrated in the above daily chart.
US Construction Spending
US construction spending reached an eight-year high in October, suggesting the economy is performing better than consumer spending has indicated. The Commerce Department said construction spending rose 1% to the highest level it since December 2007.
Construction spending has risen every month this year. It has been a bright spot for the economy as manufactures and retailers have struggled against a strong dollar. Construction spending reached a seasonally adjusted rate of $1.11 trillion. US consumer spending in October rose just 0.1% compared with the previous month.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair on rallies appears to be a good strategy in short to medium term.
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