USD/JPY has bounced back off the support level of 108.40 yesterday which indicated that bulls are currently back in action now. Recently, JPY had mixed economic reports published which leads to weakness in JPY against USD. JPY Household Spending report was published negative at -0.2% from the previous value of 2.3% which was expected to be at 0.8%, Unemployment Rate was, however, unchanged at 2.8% but BOJ Core CPI report showed increase to 0.4% from the previous value of 0.3% which was expected to decrease to 0.2%. On the USD side, recently CB Consumer Confidence report showed an increase to 122.9 from the previous value of 120.0 which was expected to be at 120.9, which helped the currency to gain good momentum against JPY. Today, JPY Retail Sales report was published at 1.9% from the previous value of 2.2% which was expected to decrease more to 1.0%. On the other hand, today USD ADP Non-Farm Employment Change report is going to be published which is expected to increase to 185k from the previous figure of 178k, Prelim GDP is expected to increase to 2.7% from the previous value of 2.6%, Prelim GDP Price Index report is expected to be unchanged at 1.0% and Crude Oil Inventories report is expected to show less deficit at -1.8M from the previous figure of -3.3M. Along with these reports FOMC Member Powell is going to speak today about the nation's key interest rates and future monetary policies which are expected to be neutral in nature. To sum up, JPY has been quite weak currently despite the positive economic reports whereas USD is quite stronger in comparison. If the USD economic reports today come out positive we can expect the further gain on the USD side dominating the JPY more in the coming days.
Now let us look at the technical view, the price has recently bounced off the 108.40 support level which has pushed the price higher towards the dynamic level of 20 EMA. Currently, the price is expected to reach the resistance area of 110.20-60 and if the price breaks above the resistance area with a daily close then further bullish move towards 112.30 is expected. As the price remains below the resistance area of 110.20-60 the bearish bias is expected to continue whereas a daily close above it will change the bias.
