Current trend

The USD/JPY pair is trading at around 153.65. The yen is holding at stable levels, and neutral macroeconomic statistics in the current situation act rather as support.

Thus, the Consumer Price Index in the Tokyo region adjusted from 2.3% to 2.3% year-on-year, the Core CPI excluding Fuel and Food corrected from 2.1% to 2.2%, and the Corporate Services Price Index increased from 2.7% to 3.0%, with preliminary estimates of 2.6%. The significant increase in the cost of services provided by companies to each other confirms the likelihood of continued high inflation, allowing the Bank of Japan to move towards tightening monetary policy. According to Reuters, the regulator will discuss the possibility of such steps at a meeting on July 31. Also worth noting is the publication of the country's government's monthly report, which notes that the national economy is recovering, but the rate of export growth has slowed, which could negatively affect the Gross Domestic Product (GDP).

In turn, the US dollar continues to move in a corrective trend in the area of 104.00 in USDX. The American currency is practically not reacting to macroeconomic indicators, since the fundamental tension within the US is now so high that traders are in no hurry to open new positions, hoping to receive new signals from the authorities. The day before, US President Joe Biden addressed the nation, explaining the reasons for his refusal to participate in the elections, and also stated that he would continue to perform his duties until the end of his term. Against this backdrop, the GDP report, which showed the national economy growing in the second quarter to 2.8% from 1.4%, and the labor market data, which showed a decrease in Initial Jobless Claims to 235.0 thousand from 245.0 thousand, went unnoticed.

Support and resistance

On the daily chart, the price has left the boundaries of the multi-month ascending channel with boundaries of 163.00–156.00 and continues to move downwards.

Technical indicators maintain a steady sell signal: the fast EMAs of the Alligator indicator are way below the signal line, and the histogram of the AO oscillator is trading in the sell zone, forming descending bars.

Support levels: 153.00, 150.80.

Resistance levels: 154.70, 157.70.

Trading tips

If the asset continues to decline and the price consolidates below the local support at 153.00, short positions can be opened with the target at 150.80. Stop-loss — 154.00. Implementation time: 7 days and more.

If the resistance level is overcome and the asset continues to grow, as well as consolidating above 154.70, buy positions with a target of 157.70 will become relevant. Stop-loss — 153.00.