The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, increasing the price of USDJPY to more than 110.00 following the release of some key economic news from the United States. The technical bias remains bearish because of a Lower Low in the recent downside move.
As of this writing, the pair is being traded near 110.12. A hurdle may be noted near 110.58, the intraday high of 20th May ahead of 111.00 which is the confluence of psychological number as well as a major horizontal resistance as demonstrated in the following daily chart.
On the downside, the pair is likely to find a support around 107.63, a major horizontal support ahead of 105.54, the swing low of the last major downside move. The technical bias will remain bearish as long as the 111.88 resistance area is intact.
US New Home Sales
New U.S. single-family home sales recorded their biggest gain in 24 years in April, touching a more than eight-year high as purchases increased broadly, a sign of growing confidence in the economy’s prospects.
Tuesday’s report from the Commerce Department, which showed a surge in new home prices to a record high, offered further evidence of a pick-up in economic growth that could allow the Federal Reserve to raise interest rates soon.
New home sales jumped 16.6 percent to a seasonally adjusted annual rate of 619,000 units, the highest level since January 2008. The percent increase was the largest since January 1992.
Data for February and March were revised to show 39,000 more units sold than previously reported. Economists had forecast new home sales, which account for about 10.2 percent of the housing market, rising to only a 523,000 unit-rate last month.
Considering the overall technical and fundamental outlook, selling the pair near above mentioned resistance levels could be a good strategy in short term.