The US dollar continues to trade with an uptrend, developing a "bullish" trend and updating local highs from July 27.
The instrument continues to be supported by expectations of further tightening of monetary policy in the US, despite the fact that inflation showed a decrease in July, retreating from record levels. Meanwhile, demand for risky assets is falling amid growing fears about a possible transition of a number of developed economies into recession. In addition, traders are concerned about the situation in the energy markets against the backdrop of the approach of cold weather and the persistence of geopolitical tensions in Eastern Europe.
The Bank of Japan is noticeably inferior to the US Federal Reserve in decisive steps to curb inflation and, in particular, to adjust monetary policy parameters, since the national economy has long been under pressure from deflationary phenomena. At the moment, the situation with the growth of consumer prices has improved somewhat, but the indicator is still below the central bank's target levels. Last Friday's data showed an acceleration in the National Consumer Price Index in July from 2.4% to 2.6%, while analysts had expected a decline of 2.2%. CPI Excluding Food and Energy in July rose from 1.0% to 1.2%, while the forecast was for a slowdown in dynamics to 0.6%. At the end of the week, investors expect the publication of preliminary data on Tokyo Consumer Price Index for August.
Bollinger Bands in D1 chart show moderate growth. The price range is expanding, but it fails to catch the development of "bullish" trend at the moment. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic, having reached its highs, reversed into a horizontal plane, indicating overbought USD in the ultra-short term.
Resistance levels: 137.50, 138.50, 139.50, 140.50. | Support levels: 136.69, 135.57, 134.54, 134.00.