Solid News

USDJPY Correction, but the Uptrend Persists

10/26/2022 2:28 PM

At the end of last week, the USD/JPY pair reached the highest values since 1990, rising to the area of 151.90. Thanks to the new currency interventions undertaken by the Japanese government and amounting to about 900.0B yen, the rapid weakening of the currency was stopped, and now it is slowly recovering its position.

The USD, on the contrary, has been under pressure from economic statistics for the past two days. Business activity in the US economy continued to slow down in October: in the manufacturing sector, the index fell to 49.9 points, and in the service sector – to 46.6 points. The consumer confidence index also showed a downward trend, falling from 107.8 points to 102.5 points, which turned out to be much lower than the forecasts of 106.5 points. All these data indicate the beginning of a slowdown in the US economy and allow a number of investors to assume that the US Fed at the end of the year may reduce the pace of interest rate hikes from 75.0 to 50.0 basis percentage points, which puts pressure on the US currency.

Investors are also waiting for Friday, when the Bank of Japan will announce its next decision on the interest rate, which is likely to remain at the same level of -0.10%. Officials are unlikely to adjust the current soft monetary policy, hoping that the weakening of the yen will continue to be compensated by currency interventions. 

Currently, the price is testing the mark of 146.87 (Murray [7/8], the middle line of the Bollinger Bands), consolidation below which will give the prospect of continuing the decline to the area of 143.75 (Murray [6/8]), 142.80 (lower limit of the Bollinger Bands). The key level for the "bulls" is still 150.00 (Murray [8/8]), with a breakout of which the growth targets will be 153.12 (Murray [+1/8]) and 156.25 (Murray [+2/8]).

The upward trend is still maintained, as evidenced by the upward reversal of the Bollinger Bands, however, the decline in the MACD histogram in the positive zone and the downward reversal of the Stochastic do not exclude the continuation of the corrective movement.

Resistance levels: 150.00, 153.12, 156.25. | Support levels: 146.87, 143.75, 142.80.

Solid ECN Securities and it affiliates don't accept applications from Indonesia, Egypt, Australia, Bonaire, Curaçao, East Timor, Liberia, Saipan, Russia, Sint Eustatius, Tahiti, Turkey, Guinea-Bissau, South Sudan and other restricted countries.
Copyright All Right Reserved 2023