The US Dollar (USD) inched higher against the Japanese Yen (JPY) on Monday, increasing the price of USDJPY to more than 113.00 amid some key economic news. The technical bias remains bullish because of a higher high in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded around 113.15. A hurdle may be noted near 114.78, the immediate resistance zone ahead of 115.37, the high of January 27th, 2017 as demonstrated in the given below chart. A break and four-hour closing above the 115.37 resistance shall incite increased buying pressure, validating a rally towards the 117.00 resistance zone in short to medium term.

On the downside, the pair is likely to find a support around 113.00, the psychological number as well as short term support ahead of 112.46, a key support level and then 111.59, the low of 6th February 2017. The technical bias shall remain bullish as long as the 111.59 support area is intact.

Japan’s Trade Balance

Japan’s trade balance turned negative in January, as imports surged and exports rose much slower than expected. The Ministry of Finance reported a merchandise trade deficit of ¥1.087 trillion in January, after posting a ¥641.4 billion surplus the previous month. Analysts in a median estimate called for a deficit of ¥636.8 billion. Exports increased at an annualized 1.3% in January, well below forecasts calling for 4.7% increase. Exports rose in December for the first time in 15 months. Meanwhile, imports rose 8.5% in the 12 months through January, compared to forecasts calling for a 4.7% increase.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair around current levels appears to be a good strategy in short to medium term.