Current trend

The USD/JPY pair shows a rather active decline, developing an uncertain "bearish" trend, which has been trying to form since the end of last week. The instrument is trying to consolidate below the psychological level of 144.00; however, investors are still waiting for the publication of macroeconomic statistics.

On Friday, the June report on the US labor market will be presented, which may somewhat correct the plans of the US Federal Reserve regarding the pace of further tightening of monetary policy. There is practically no doubt that the interest rate will be raised again by 25 basis points at the next meeting, but the question of another adjustment of the value before the end of this year is still open.

In Japan, at the end of the week, data on Labor Cash Earnings, which may slow down in May from 1.0% to 0.7%, will be published, as well as the dynamics of Overall Household Spending, Coincident Index and Leading Economic Index. In addition, investors are watching the rhetoric of the Bank of Japan, fearing that the regulator may resort to new foreign exchange interventions in case of further depreciation of the national currency. So far, the psychological level for investors remains at 145.00, and the instrument is not yet able to consolidate above it.

Support and resistance

On the D1 chart, Bollinger Bands are gradually reversing horizontally. The price range is narrowing from above, reflecting a change of trend in the short term. MACD reversed downwards having formed a new sell signal (located below the signal line). Stochastic shows a more confident decline and signals the risks of the US currency being oversold in the ultra-short term.

Resistance levels: 144.00, 145.00, 146.00, 147.00.

Support levels: 143.28, 142.54, 141.50, 140.79.

Trading tips

Short positions may be opened after a breakdown of 143.28 with the target at 141.50. Stop-loss — 144.00. Implementation time: 1-2 days.

A rebound from 143.28 as from support followed by a breakout of 144.00 may become a signal for opening new long positions with the target at 146.00. Stop-loss — 143.00.