Current trend

The American currency shows mixed trading dynamics in the USD/JPY pair during the Asian session, holding near 155.60 and retreating from the local lows of April 10, updated at the end of last week, when, according to experts, the Bank of Japan used the currency intervention mechanism to support the exchange rate national currency. There has been no official confirmation from the regulator regarding intervention in the market situation, but against the backdrop of the negative dynamics of the yen, which has been observed for the third session in a row, investors are expecting new actions from the financial authorities.

The day before, Bank of Japan Governor Kazuo Ueda said the regulator would take action if a weak yen significantly affected consumer prices, and added that the regulator officials could raise interest rates earlier than expected if inflation rises above forecasts. Most experts doubt that currency interventions will have a significant effect, since last week economists already allocated 59.0 billion dollars to support the national currency, but its strengthening turned out to be temporary, since monetary factors remain negative: in March, the cost of borrowing increased to 0.10%, remaining significantly lower than in other developed economies.

Macroeconomic statistics from Japan published today did not have a significant impact on the dynamics of the pair. However, the Leading Economic Index in March showed a slight decline from 112.1 points to 111.4 points, which turned out to be slightly better than the forecasts of 111.0 points, while the Coincident Index, on the contrary, strengthened its position from 111.5 points to 113.9 points. Tomorrow, trading participants will pay attention to the March data on the dynamics of Overall Household Spending adjusted for inflation, where current forecasts suggest an increase in the negative dynamics of the indicator by 2.4% year on year after -0.5% previously.

Support and resistance

On the daily chart, Bollinger Bands demonstrate mostly flat trading dynamics. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is reversing towards growth, forming a new buy signal and being located above the signal line, and Stochastic is approaching its highs, indicating the risks of overbought US dollar in the ultra-short term.

Resistance levels: 156.00, 156.50, 157.00, 157.50.

Support levels: 155.50, 155.00, 154.50, 154.00.

Trading tips

Long positions can be opened after a confident breakdown of the 156.00 level with a target of 157.00. Stop-loss — 155.50. Implementation time: 1-2 days.

A reversal of the instrument downward near current levels followed by a breakdown of 155.50 may become a signal to open short positions with a target of 154.50. Stop-loss — 156.00.