USDMXN Higher after Mexico Consumer Confidence beat Forecasts
The USDJPY has extended its gains for the day as well as the week on the back of a better-than-expected increase in the US ISM Non-Manufacturing PMI figure for October. In results published by the Institute for Supply Management, the US ISM Non-Manufacturing PMI rose to 54.7; better than the consensus figure of 53.5 as well as the previous figure of 52.6.
The strong rebound, which also surpassed the tradable deviation, was enough to send the USDJPY up by 28 pips. This has extended the bullish run of the USDJPY which started on Friday with the US Non-farm Payrolls and has been supported by continuous flow of upbeat news from the US-China trade front.
The USDJPY is now trading at 109.10, slightly off its intraday highs of 109.15.
The pair is now inching towards the next major resistance located at 109.32 (61.8% Fibonacci retracement from the April 24 swing high to the August 26 swing low). This is also the site of previous highs on August 1 and October 30.
A decisive close above this level could open the door for an initial approach to 109.94 (highs of May 16 and May 30, as well as previous lows of March 26/28 in role reversal). Above this level, price could find resistance at 110.66, (March 21 and May 21/22 highs) which is also the 78.6% retracement level.
Failure to break the 61.8% retracement level could lead to a retest of 108.53(50% retracement). A break below this level temporarily invalidates the upward push and price could then cascade down to the July 3 and September 16 lows at 107.48 (38.2% Fibonacci level).