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The USDJPY is Consolidating Near Local Highs

2/27/2023 10:59 AM

USD/JPY shows mixed dynamics, holding near the level of 136.30, which is located in the area of local highs from December 20, amid comments from Kazuo Ueda, who is to replace Haruhiko Kuroda as the Governor of the Bank of Japan in April. In his speech, the official noted that a significant level of uncertainty remains in the national economy regarding further recovery, which is a clear signal in favor of maintaining the current ultra-soft monetary policy and keeping the interest rate at negative values. At the same time, on Friday, February 24, the market again received evidence of a further increase in inflationary pressure in Japan. In January, the National Consumer Price Index accelerated from 4.0% to 4.3%, which turned out to be slightly worse than market expectations at the level of 4.5%, while the CPI excluding Food and Energy corrected from 3.0% to 3.2%, fully justifying analysts' forecasts.

The macroeconomic data released today provided little support to the yen. The Coincident Index in December rose from 98.9 points to 99.1 points, which turned out to be better than the neutral forecasts, while the Leading Economic Index remained at the same level of 97.2 points.

Bollinger Bands on the daily chart show a steady increase. The price range expands from above, freeing a path to new local highs for the "bulls". MACD indicator is growing preserving a stable buy signal (located above the signal line). Stochastic reversed back to the upward plane after an unsuccessful attempt to retreat from its highs, indicating the risks of the American dollar being overbought in the ultra-short term.

Resistance levels: 136.50, 137.50, 138.50, 139.58. | Support levels: 135.57, 134.50, 133.61, 133.00.

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