The US Dollar (USD) inched lower against the Japanese Yen (JPY) on Wednesday, decreasing the price of USDJPY to less than 111.75 amid some key economic releases. The technical bias remains bullish because of a higher high in the recent upside move.
Technical Analysis
As of this writing, the USDJPY pair is being traded around 111.65. A hurdle may be noticed near 113.92, an immediate trendline resistance area ahead of 114.00, the psychological number and then 114.39, the high of the last major upside rally as demonstrated in the given below daily chart.
On the downside, a support may be seen near 109.26, an immediate trendline support area ahead of 107.97, the 50% fib level and then 107.55, another trendline support level as demonstrated with pink color in the above daily chart. The technical bias shall remain bullish as long as the 107.55 support level is intact.
US Manufacturing PMI Index
The seasonally adjusted IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) registered 55.3 in July, down slightly from 55.4 in June. Overall, the latest improvement in the health of the sector was the joint-weakest in 2018 to date, but remained strong in the context of historical data.
Production continued to rise across the U.S. manufacturing sector in July, extending the current sequence of growth that began in June 2016. Where an increase in output was reported, panellists linked this to greater client demand and larger new order volumes. Although the rate of expansion was strong overall, it was the slowest since November 2017.
Trade Idea
Considering the overall technical and fundamental outlook, selling the USDJPY pair near current levels appears to be a good strategy in short to medium term.