Technical Bias: Bullish
- USDJPY plunges as bears gain momentum
- Japan’s machinery orders news is due tomorrow
- The pair might test the 115.50 support area in near future
The US Dollar (USD) extended downside movement against the Japanese Yen (JPY) on Wednesday, dragging the price of USDJPY to less than even 117.50 ahead of some key economic releases. The technical bias remains bullish due to a Higher Low on the daily chart.
As of this writing, the pair is being traded near 117.44. A support can be seen near 115.51, the 38.2% fib level ahead of 113.56, the 50% fib level and then 113.00, the confluence of 100-Day Simple Moving Average as well as psychological number.
On the upside, the pair is expected to face a hurdle near 117.92, the 23.6% fib level ahead of 120.81, the swing high of the last major upside rally and then 121.83, the high of 2014 as demonstrated in the above chart. The technical bias will remain bullish as long as the 115.51 support area is intact.
The Machinery Orders in Japan declined by 5.8% in November as compared to 4.9% decline in the month before, the average forecast of different economists says. The actual report will be released tomorrow. Generally speaking, higher machinery orders are considered positive for the Japan’s economy thus a worse than expected actual outcome will be seen as bullish for USDJPY and vice versa.
Considering the overall technical and fundamental outlook, selling the pair around the current levels could be a good strategy if the price leaves a bearish pin bar or bearish engulfing pattern on the daily chart.