The USDJPY continues to hold on to gains posted this week after the US Durable Goods Orders for February 2020 showed a better-than-expected increase of 1.2%, as opposed to the 0.1% slump that the markets were expecting. It was also a better reading than last month’s 0.2% drop.
According to data announced by the US Census Bureau on Wednesday, core durable goods orders dropped by 0.6% (minus transportation). This shows that the increase in the IS Durable Goods Orders came from transport equipment, which accounted for an $87.0 billion gain. The USDJPY went up by 13 pips in response to the news and is currently trading at 114.11.
Read our Best Trading Ideas for 2020.
Technical Outlook for USDJPY
The USDJPY monthly and weekly charts reveal that the pair is now challenging the upper edge of the long-term symmetrical triangle, having benefitted from the risk-off sentiment that has led to US Dollar strength for the majority of March 2020. The pair would need to break the upper triangle border with confirmation coming from a 3% penetration close above this border by the weekly or monthly candles. This move would also take the USDJPY above the 111.947 resistance line.
A break of the triangle to the upside as well as the 111.947 resistance opens up opportunities for the attainment of 114.06, and possible 115.83 if risk-off sentiment continues to dominate the market.
On the flip side, rejection at the triangle’s upper border or the 111.947 resistance provides an opportunity for a retest of support levels at 110.58 or 109.70, with further support areas at 108.42 and 107.82 lurking underneath. These are all former resistance levels that have undergone the S-R flip to function as new support areas.