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USDJPY Market Update

10/12/2022 12:19 PM

The USD/JPY pair is developing an uptrend, renewing record highs. After some decline last week, the dollar resumed active growth against the yen, despite the risks of new currency interventions from the Bank of Japan: the instrument consolidated above 146.00, and the "bulls" are waiting for the publication of the September minutes of the US Federal Reserve meeting during the day.

Additional pressure on the positions of the yen today is exerted by uncertain macroeconomic statistics from Japan. Machinery Orders in August showed a sharp decline of 5.8% after an increase of 5.3% in the previous month, while analysts expected –2.3%, and in annual terms the indicator increased by 9.7% after 12.8%, shown a month earlier, which also turned out to be worse than forecasts at the level of 12.6%. The day before, August data recorded a surplus in the Trade Balance, which decreased by 96.1% compared to the same period last year and amounted to 58.9 billion yen due to the fact that a weak national currency causes an increase in the cost of imports into the country, while increasing prices Japanese goods sold abroad are not so significant.

During the week, the market's attention will be drawn to publications from the US. In particular, key inflation statistics for September will be released tomorrow, where current forecasts suggest a slowdown in the Consumer Price Index from 8.3% to 8.1%, while the Core CPI excluding Food and Energy may again adjust from 6.3% to 6.5%.

Bollinger Bands in D1 chart show moderate growth. The price range is narrowing, reflecting uncertain dynamics of trading in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is also showing a slight increase, but is located in close proximity to its highs, indicating the risks of the US dollar being overbought in the ultra-short term.

Resistance levels: 147.00, 148.00, 149.00, 150.00. | Support levels: 146.00, 145.00, 144.00, 143.51.

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