The US Dollar (USD) inched higher against the Japanese Yen (JPY) on Monday during the Asian session, increasing the price of USDJPY to more than 102.50 after a major slump last week amid the release of some key economic news. The technical bias remains bearish because of a Lower High and a Lower Low in the recent wave.
As of this writing, the pair is being traded near 102.53. A support may be noted around 101.20, a major horizontal support in the weekly chart ahead of 101.00, the psychological number and then 99.00, the swing low of the latest major downside move as demonstrated in the following daily chart.
On the upside, the pair is likely to face a hurdle near 103.57, a key horizontal resistance area ahead of 106.20, another major resistance and then 107.50, the swing high of the latest major upside rally. The technical bias will remain bearish as long as the 107.50 resistance area is intact.
The U.S. economy grew far less than expected in the second quarter as inventories fell for the first time since 2011, but a surge in consumer spending pointed to underlying strength. Gross domestic product increased at the 1.2 percent annual rate after rising by a downwardly revised 0.8 percent pace in the first quarter, the Commerce Department said on Friday. The economy was previously reported to have grown at a 1.1 percent pace in the first quarter. Economists polled by Reuters had forecast GDP growth rising at the 2.6 percent rate in the last quarter.
Considering the overall technical and fundamental outlook, selling the pair on short term rallies appears to be a good strategy in the near term.