The US Dollar (USD) fell against the Japanese Yen (JPY) on Monday, dragging the USDJPY to less than 111.50 following some key economic releases lately. The technical bias has turned bullish on four-hour and smaller timeframes because of a Higher High in the ongoing upward rally.
As of this writing, the pair is being traded near 111.36. A support may be noted near 111.36 which is a major horizontal support area as demonstrated in the following daily chart. A rebound from 111.36 will threaten the 112.00 resistance in short term.
On the upside, the pair is likely to face hurdle near 113.80, the swing high of the last major upside rally ahead of 114.00, the psychological number and then 114.44, the swing high of last month. The technical bias will remain bullish as long as the 107.83 support area is intact.
US Manufacturing Activity
Markit Economics’ preliminary manufacturing purchasing manager’s index (PMI) for April came in at 50.8. It was a lower-than-expected reading that marked the weakest improvement in business conditions since September 2009.
Economists had forecast a flash PMI of 52, according to Bloomberg, up from 51.5 in March. Manufacturing employment gained at the weakest rate since June 2013. Production levels rose at the slowest pace in the survey’s six-and-a-half-year history. New-businesses growth was the most sluggish so far in 2016.
Considering the overall technical and fundamental outlook, buying the pair around current levels could be a good strategy in short to medium term if we get a pullback near the 111.36 support area.