The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, increasing the price of USDJPY to more than 119.80 following the release of US Consumer Confidence report which showed unprecedented improvement in the consumer confidence. The technical bias remains neutral in the short term because of Range trading since last many days.
Technical Analysis
Technically, the Fibonacci-defined range remains firm in place, as the pair has found buying interest around the 38.2% retracement of its latest weekly decline around 119.35. The 1 hour chart shows that the 100 and 200 SMAs capped the upside around the mentioned daily high and head slightly lower, whilst the technical indicators diverge from each other in neutral territory, reflecting the lack of directional strength.
In the 4 hours chart, however, the technical indicators are heading lower below their mid-lines, supporting additional declines for the upcoming hours, particularly on a clear break below the mentioned Fibonacci support.
US Consumer Confidence
A survey of consumer confidence for the US rose in September to the second highest level since the end of the Great Recession, bettered only by a slightly higher reading in January. The privately run Conference Board said its index of consumer confidence climbed to 103.0 this month from 101.1 in August.The present situation index, a measure of current conditions, also climbed to an eight-year high.
The increase in the headline number was a welcome relief to Wall Street. Economists had projected the index to fall to 96.0, partly because of fresh worries about the health of the world economy.
Trade Idea
Considering the overall technical and fundamental outlook, buying the pair around current levels could be a good strategy in short to medium term.
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