Current trend

Today, the USD/JPY pair rose to 147.00 after the “hawkish” comments of the Bank of Japan representatives aimed at normalizing the situation on the stock market and the yen exchange rate.

The Deputy Governor of the Bank of Japan, Shinichi Uchida, said that the regulator would not raise interest rates in an unstable situation. It became a catalyst for the upward dynamics of the NI 225 stock index by 7.4%, putting pressure on the positions of the national currency. On Wednesday, the USD/JPY pair corrected from the support level of 143.80 to 147.00. The official noted that the strong volatility of the past week could change monetary policy plans if it affects the central bank’s economic and price forecasts, as well as the likelihood of Japan reaching its 2.0% inflation target.

The trading instrument is moving in a long-term downtrend formed on July 31, when the key support level of 152.41 was broken. After that, the price rapidly declined, reaching 146.78 and the support level of 143.80. There, a correction to the resistance level of 147.00 began, below which the price is today. If it is kept, short positions, with the targets at 143.80 and 140.80, are relevant. The trend line is at 152.40, and while the quotes are below it, the priority for selling remains. The RSI (21) indicator consolidates in the oversold zone and is preparing to exit it upwards, which reflects the likelihood of a continuation of the correction.

The medium-term trend remains downward. The asset is testing the trend line of 146.41–145.98, trading slightly above it. If the quotes return below this area, a sell pattern will form, within which short positions, with the first target at 144.04 and the second at 141.68 (August low), are relevant. In case of consolidation above the 146.41–145.98 area, the trend will reverse upwards, and long positions, with the target in zone 2 (151.01–150.56), will become relevant.

Support and resistance

Resistance levels: 147.00, 152.41.

Support levels: 143.80, 140.80.

Trading tips

Short positions may be opened from the 147.00 level, with the target at 143.80 and stop loss 148.10. Implementation period: 9–12 days.

Long positions may be opened above the 148.10 level, with the target at 151.00 and stop loss 146.85.