Current trend

Quotes of the USD/JPY pair are correcting in a sideways trend around 157.82. The rapid decline of the yen continues, and on Monday the instrument reached a new high of 160.00, after which the rate sharply went up. After a significant correction, Japanese Prime Minister Fumio Kishida during a press conference refused to comment on information about the fact of possible currency interventions. However, given the trading volumes, the Bank of Japan apparently intervened in the market situation, and this will finally become clear after the publication of the regulator's current account balance report next week.

The yen has been actively losing value over a long period of time, without receiving support from macroeconomic statistics: Retail Sales in March slowed down from 4.7% to 1.2%, with a forecast of 2.5%, which, in turn, became a consequence of increasing inflation pressure on household finances. The Bank of Japan report said service costs continue to rise, but sharp wage increases offered by companies will significantly increase household incomes this year and eventually stabilize the Consumer Price Index around the target level of 2.0%. The April statistics reflected an increase in the Manufacturing PMI to 49.6 points from 48.2 points; however, this did not provide noticeable support to the yen.

The US dollar continues to move in an upward trend, and USDX quotes today remain around 106.200, trying to overcome the monthly high. Volatility in the US currency may increase significantly this evening, when the US Federal Reserve publishes a decision on the interest rate, which with a probability of more than 98.0% will be kept at 5.25–5.50%. In addition, today data on Nonfarm Payrolls from Automatic Data Processing (ADP) will be published: according to forecasts, the figure may add 179.0 thousand, which is slightly lower than 184.0 thousand a month earlier. In addition, investors will evaluate statistics on the Manufacturing PMI, which could drop to 49.9 points from 51.9 points.

Support and resistance

On the daily chart, the price remains within the ascending channel with boundaries of 160.00–152.00, being in the stage of forming a global growth wave.

Technical indicators hold a buy signal that remains stable. The fast EMAs of the Alligator indicator are above the signal line, and the AO histogram, being in the buy zone, is forming ascending bars.

Support levels: 157.00, 154.50.

Resistance levels: 158.30, 160.20.

Trading tips

If the resistance level is overcome and the asset continues to grow, as well as consolidating above 158.30, a buy position with a target of 160.20 will become relevant. Stop-loss — 157.50. Implementation time: 7 days and more.

If the asset reverses and declines and the price consolidates below the local support at 157.00, short positions can be opened with the target at 154.50. Stop-loss — 158.00.