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USDJPY Market Update

11/14/2022 11:11 PM

The US dollar shows a slight increase, consolidating near the local lows of August 31, updated at the end of last week. The USD/JPY pair is testing 139.40 for a breakout, having only technical factors at its disposal, but tomorrow investors will pay attention to October data on the dynamics of producer inflation and the speech of US Federal Reserve board member Lisa Cook.

In turn, Japan is expected to release key statistics on the dynamics of Gross Domestic Product (GDP) for the third quarter on Tuesday. It is expected that the indicator will slow down from 0.9% to 0.3% in quarterly terms and from 3.5% to 1.1% in annual terms. Also tomorrow, September data on Industrial Production will be published: experts expect the figure to fall by 1.6%. At the end of the week, traders focus on inflation statistics. Despite the fact that all this time the Bank of Japan maintained a wait-and-see attitude, the Consumer Price Index in the country may begin to decline: current forecasts suggest that in October it will slow down from 3.0% to 2.7%. Meanwhile, the Current Account indicator in the first half of the year showed the fastest fall in annual terms since the 2008 global financial crisis, falling to 4.8458 trillion yen, losing 58.6%. First of all, this was facilitated by a downward correction in the Trade Balance due to the depreciation of the national currency and an increase in the cost of raw materials. Imports into the country amounted to 58.76 trillion yen, adding 47.1%, and Exports were 49.52 trillion yen (up 21.3%), while the trade deficit in services amounted to 3.16 trillion yen.

Bollinger Bands in D1 chart demonstrate active decrease. The price range is widening but does not conform to the activity of the "bears" in the short term currently. MACD is going down preserving a stable sell signal (located below the signal line). Stochastic is showing similar dynamics; however, the indicator line is rapidly approaching its lows, indicating the risks of the US dollar being oversold in the ultra-short term.

Resistance levels: 139.90, 140.78, 141.50, 142.54. | Support levels: 138.50, 137.50, 136.50, 135.50.

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