The US Dollar (USD) extended upside movement against the Japanese (JPY) on Monday, increasing the price of USDJPY to more than 121.50 following the release of Japan’s trade data. The technical bias already remains bullish due to a Higher Low in the recent dip.
Technical Analysis
As of this writing, the pair is being traded near 121.69. Immediate hurdle may be noted around 122.00 which is the confluence of psychological number as well as high of the last major upside rally as demonstrated in the following chart. A break above the 122.00 resistance area could result in a new multi-year high, validating a move towards the 125.00 handle in long term.
On the downside, the pair is likely to find a support around 120.00, the psychological number ahead of 118.88, the low of the last major dip. The technical bias will remain bullish as long as the 188.88 support area is intact.
Japan’s Trade News
Japan’s exports rose unexpectedly by 8% in March as compared to 8.5% in the same month of the year before, up beating the average forecast of 6.4% by analysts. Generally speaking, higher exports are considered positive for the economy thus a better than expected actual outcome might spur short term bearish momentum in the price of USDJPY.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels appears to be a good strategy in short to medium term if we get a bearish pin bar or bearish engulfing candle on daily chart. It is always recommended to follow tight money management with at least 1:2 risk/reward ratio to optimize your profitability in long run.
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