The US Dollar (USD) extended upside movement against the Japanese Yen (JPY) on Wednesday, increasing the price of USDJPY to more than 124.20 ahead of some major economic releases which are due later in the US session. The technical bias remains bullish due to a Higher High and Higher Low in the recent wave on daily chart.
As of this writing, the pair is being traded around 124.26. A hurdle may be noted near 124.59, the 76.4% fib level ahead of 125.27, the swing high of the large bearish candle which emerged last week and then 125.89, the swing 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 123.79, the 61.8% fib level ahead of 123.14, the 50% fib level and then 123.00, the confluence of psychological number as well as major horizontal support. The technical bias will remain bullish as long as the 123.00 support area is intact.
US Consumer Price Index
The US Bureau of Labor Statistics is due to release the Consumer Price Index (CPI) report today during the early New York session. CPI is considered a main gauge for inflation which plays key role in policy making. According to the average forecast of different economists, the CPI remained 0.2% in July as compared to 0.1% in month before. Generally speaking, higher CPI figure is considered positive for the developed economies like the United States. Thus a better than expected actual outcome will incite renewed buying pressure in the price of USDJPY and vice versa.
Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good strategy if we get another bearish engulfing candle or bearish pin bar on four-hour timeframe after the release of CPI data and FOMC minutes.