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The USDJPY is Preparing to Test 149

10/17/2022 11:34 AM

During the Asian session, the USD/JPY pair is growing slightly, consolidating near new record highs and 148.85 as a result of the high interest rate policy of the US Federal Reserve.

Meanwhile, the Bank of Japan maintains a wait-and-see attitude, as consumer inflation remains below target levels. Still, the regulator is extremely concerned about the unilateral weakening of the yen, which forces it to resort to foreign exchange interventions. However, carried out for the first time in 24 years, such a measure has not yet had significant consequences, even in the short term. The head of the department, Haruhiko Kuroda, noted earlier that the biggest fall of the yen since 1998 to 145.00 in the USD/JPY pair would destabilize the work of the country's business. Analysts suggest that the next intervention of the financial authorities is possible when new "critical levels" are reached, for example, 150 yen per dollar.

Macroeconomic statistics from Japan released on Monday provide the national currency with moderate support: industrial production rose by 3.4% in August after rising by 2.7% last month, although analysts expected the same growth rates to remain, and in annual terms, the indicator corrected from 5.1% to 5.8%, which also was better than the market's neutral forecasts.

On the daily chart, Bollinger bands are growing moderately: the price range is expanding but not as fast as the "bullish" activity develops. The MACD indicator is growing, keeping a strong buy signal (the histogram is above the signal line). Stochastic approached its highs and reversed into a horizontal plane, indicating that the US dollar may become overbought in the ultra-short term.

Resistance levels: 149.00, 150.00, 151.00, 152.00. | Support levels: 148.00, 147.00, 146.00, 145.00.

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