USD could not continue to strengthen against yen after report showed that US housing market looked pessimistic. The National Association of Realtors reported that pending home sales index was down 3.7% last month, worse than expected. Pending home sales in April gained 3.9%, which was revised down from previous report at 5.1%.
The report came up after US Department of Commerce reported that personal spending was up 0.4% last month, in line with expectation, while April figure was revised up 1.1% from previous report at 1.0%, which is biggest gain in the last seven years.
US personal income was up 0.2% only, lower than expected after a gain of 0.5% in the previous month.
USD/JPY is testing intraday key resistance at 102.831. Hourly stochastic has crossed down, RSI is flat just below the overbought area but 20 MA has crossed above 50 MA.
Here is some possible scenario: the pair possibly will continue its bullish move if it managed to break above 102.831, with 103.133 as target and 103.472 in extension. However, if we can get clear bearish signal confirmation before the breakout occurs, we might see some correction move towards the 50% Fibonacci at 102.191.
Consider 102.191 as intraday key support. A break below the support possibly will be followe by deeper bearish move to 101.852-101.550.
– Buy on break of 102.831; S/L @ 102.500, T/P @ 103.133 & 103.472 in extension
– Sell on bearish signal confirmation before 102.831 breaks; S/L @ 103.000, T/P @ 101.852 & 101.550 in extension
Good luck, Traders.