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USDJPY Market Update

10/31/2022 11:28 AM

The US dollar shows a weak growth, testing the level of 148.00 for a breakout again. Considerable support for the US currency is provided by the expectations of the US Federal Reserve's interest rate hike this week. The forecasts suggest that the value will be adjusted by 75 basis points for the fourth time in a row, after which the regulator is likely to take a short pause, or slow down the pace of further tightening of monetary policy.

Macroeconomic statistics from Japan published today do not have a significant impact on the dynamics of the instrument. Industrial Production in September fell by 1.6% after rising by 3.4% in the previous month, while analysts had expected a contraction of 1.0%. In annual terms, the indicator accelerated sharply from 5.8% to 9.8%, which turned out to be significantly better than forecasts at the level of 8.7%. Retail Sales in September increased by 1.1%, slowing down slightly after rising by 1.4% against the expected 0.6%, and in annual terms, the figure accelerated from 4.1% to 4.5% with a neutral analysts' forecast. In turn, the Consumer Confidence Index in October fell from 30.8 points to 29.9 points, although analysts had expected the index to rise to 31.5 points.

Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is trying to reverse upwards after a long steady decline last week. Currently, MACD indicator is about to form a new buy signal (it should be located above the signal line). Stochastic keeps its upward direction but is rapidly approaching its highs, which reflects the risks of overbought US dollar in the ultra-short term.

Resistance levels: 148.27, 149.00, 150.00, 151.00. | Support levels: 147.00, 146.00, 145.00, 144.00. 

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