The USD/JPY pair shows multidirectional dynamics, getting ready to test 140.45 for a breakout. The US currency is moderately supported by growing expectations of further tightening of monetary policy by the US Federal Reserve after a number of "hawkish" comments from the regulator's representatives.
In turn, the macroeconomic background from the US remained rather neutral. In particular, on Friday, November 18, data on the dynamics of Existing Home Sales were released, reflecting a decrease in the indicator by 5.9% in October after a decrease of 1.5% in the previous month, while analysts expected -0.1 %. In absolute terms, sales fell from 4.71 million to 4.43 million, while the forecast was 4.38 million.
Statistics from Japan, on the contrary, turned out to be quite optimistic: the National Consumer Price Index increased from 3.0% to 3.7% in October, while analysts had expected a decline to 2.7%. The National CPI excluding Food and Energy accelerated from 1.8% to 2.5%, also well ahead of market expectations at 1.9%. The Governor of the Bank of Japan, Haruhiko Kuroda, believes that, despite the ongoing uncertainty in the national and global economies, the Core Consumer Price Index on an annualized basis may slow down as early as next year, which will allow the indicator to return to the target value of 2.0%. The official also said that the regulator will continue to ease monetary policy, but in order to maintain price stability, it is important that nominal wages show constant growth, especially for existing employees working in small and medium-sized businesses.
Bollinger Bands in D1 chart demonstrate a stable decrease. The price range is narrowing, reflecting the correctional trend formation in the short/ultra-short term. MACD has reversed to growth having formed a new buy signal (located above the signal line). Stochastic grows more steadily and is rapidly approaching its highs, which reflects risks of the overbought US dollar in the ultra-short term.
Resistance levels: 140.79, 141.50, 142.54, 143.51. | Support levels: 139.90, 138.50, 137.50, 136.50.