The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, increasing the price of USDJPY to more than 100.50 following the release of some key economic news. The technical bias, however, remains bearish because of a Lower High in the recent upside rally.
Technical Analysis
As of this writing, the pair is being traded near 100.59. A support can be noticed around 100.00, the confluence of the horizontal support as well as the psychological number ahead of 99.54, another major horizontal support as well as the swing low of the latest major downside move, and then 99.00, the post-brexit low as well as another psychological number.
On the upside, the pair is likely to face a hurdle near 100.88, a key horizontal resistance area ahead of 102.68, another major horizontal resistance and then 104.32, the swing high of the latest major upside rally. The technical bias will remain bearish as long as the 104.32 resistance area is intact.
US Consumer Confidence
A gauge of consumer confidence rose in September to its highest level in nine years, a sign that American households are emerging from the recession’s long shadow and could continue to support the U.S. economic growth. The Conference Board’s consumer-confidence index increased to a seasonally adjusted 104.1 in September from an upwardly revised 101.8 in August, the group said Tuesday. That was its highest level since August 2007, which marked the start of the financial crisis that led to a severe recession in 2007-2009. Economists surveyed by The Wall Street Journal had expected a September reading of 99.1.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels could be a good strategy if we get a valid bullish reversal candle on the daily timeframe.
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