Despite the strengthening of the USD's position across the entire spectrum of the market on the eve of the next increase in interest rates by the US Fed, the USD/JPY pair failed to update the July maximum and stopped movement below the level of 137.40.
The further dynamics of the trading instrument will depend on the macroeconomic data this week. Thus, preliminary data on the USA's gross domestic product (GDP) for Q2 are expected on Thursday. Market participants predict its decline by 0.8% compared to the previous period. If the indicator comes out of the negative area, dollar investors may perceive this news negatively, because then the aggressive steps of the US Fed aimed at raising the discount rate will look illogical.
In addition, on Friday, the markets will follow the statistics from Japan. Analysts predict that the core consumer price index in the Tokyo region in annual terms for August will be 2.5%. If the actual value of the indicator turns out to be close to the forecast or confirms it, then the yen exchange rate may show an upward trend in the future, since an increase in inflation will push the Bank of Japan to gradually tighten the parameters of monetary policy.
In general, the volatility of the instrument may increase at the end of this week, and the direction in which the movement of quotations will continue in the mid-term will probably be determined after the publication of macroeconomic data.
The long-term trend is upward. The growth of the USD/JPY pair stopped below the resistance level of 137.40, with a breakout of which the next target will be to update the July maximum. If the mark of 137.40 is held, the price may adjust to the levels of 135.30 and 132.20.
The mid-term trend changed to an upward one last week, when the key resistance of 134.64-134.24 was broken by the bidders. Now the growth target is the target zone 138.75–138.32. The key support, from which it is worth considering long positions, is shifting to the area of 133.65–133.26.
Resistance levels: 137.40, 139.20. | Support levels: 135.30, 132.20.