The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, increasing the price of USDJPY to more than 114.00 following the release of some key economic news. The technical bias has also turned bullish because of a Higher Low in the recent downside move.
Technical Analysis
As of this writing, the pair is being traded near 114.02. A support may be noted around 112.15, the intraday high of yesterday ahead of 111.04, the swing low of the last major downside move and then 110.98, the low of February.
On the upside, the pair is likely to face a hurdle near 114.87, the swing high of the last major upside rally ahead of 115.00, the psychological number and then 115.97, a major horizontal resistance. The technical bias will remain bullish as long as the 111.04 support area remains intact.
US Construction Spending
U.S. construction spending surged in January to the highest level since 2007, in the latest indication that the economy was regaining momentum after slowing in the fourth quarter.
Construction spending increased 1.5 percent to $1.14 trillion, the highest level since October 2007, as both private and public outlays rose, the Commerce Department said on Tuesday. That followed an upwardly revised 0.6 percent increase in December, previously reported as a 0.1 percent gain.
Economists polled by Reuters had forecast construction spending rising 0.4 percent in January. Construction outlays were up 10.4 percent from a year ago.
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 term
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