The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, for the sixth day in a row, hence increasing the price of USDJPY to more than 120.50 following the release of Japan’s growth data. The technical bias already remains bullish due to a Higher Low and Higher High in the ongoing wave on daily chart.
As of this writing, the pair is being traded near 120.85. A hurdle may be noted around 121.00, the psychological number ahead of 121.13, the 76.4% fib level and then 122.00, the confluence of psychological number as well as high of the last major upside rally as demonstrated in the following daily chart.
On the downside, the pair is likely to find a support around 120.59, the 61.8% fib level ahead of 120.16, the 50% fib level and then 118.88, the low of the last major dip. The technical bias will remain bullish as long as the 118.88 support area is intact.
Japan’s economy grew at 0.6% in the first quarter as compared to 0.4% in the quarter before, a government report said today. The GDP report exceeded the expectations of 0.4% growth in the first quarter which could consequently spur bearish momentum in the price of USDJPY. Generally speaking, higher GDP reading is considered positive for an economy and vice versa.
Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good option if we get a solid bearish reversal indication in the form of bearish pin bar or bearish engulfing candle. Always use proper risk and reward ratios to optimize your profitability.