USDJPY Remains Vulnerable Ahead of Fed Meeting

The US Dollar (USD) inched slightly lower against the Japanese Yen (JPY) on Monday, dragging the price of USDJPY to less than 107.00 during the Asian session. The technical bias remains bearish because of a Lower High in the recent upside rally.

Technical Analysis

As of this writing, the pair is being traded near 106.90. A support may be noted around 106.55, the intraday low of Friday ahead of 106.25, the low of last week and then 105.54, the swing low of the last major downside move as demonstrated in the following daily chart.

On the upside, the pair is likely to face a hurdle near 107.26, the intraday high of Friday ahead of 107.81, the horizontal resistance area and then 108.00, the psychological number. The technical bias will remain bearish as long as the 111.44 resistance area is intact.

US Consumer Sentiment

Preliminary consumer sentiment data for June published by the University of Michigan showed sentiment edging above expectations, but down from May. The Consumer Sentiment Index decreased to a 94.3 from 94.7 last month. This was slightly higher than the 94 analyst were expecting, according to Thomson Reuters. The current conditions portion of the survey rose to 111.7 from 109.9 in May, which was the reason for the slight rise in overall sentiment. Consumers were more downbeat about the future, though. The Consumer Expectations Index fell to 83.2 from 84.9 in May.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair could be a good strategy if we get a valid bullish reversal candle on the daily chart.'
Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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