As a result of the weakening of the American currency, the USD/JPY pair consolidated below the key support level of 139.00, which opens up the possibility of further movement of quotations to 132.00 and 130.00.
The "bearish" sentiment in the asset remains dominant, and the dollar is preparing to end the week with a significant decline, continuing its negative dynamics after the comments of the head of the US Federal Reserve, Jerome Powell, who confirmed the regulator's readiness to slow down the pace of monetary tightening at the next meeting on December 14. According to the CME FedWatch Instrument, traders estimate the probability of a 50.0 bps rate correction at 79.0%, although before the official's speech, they considered the 75.0 bps scenario a priority.
Meanwhile, Japan's economy has begun to recover, with October retail sales up 4.3% YoY, below the 5.0% forecast but still quite strong, and Q3 capital expenditure increased by 9.8% YoY, well above the forecast of 6.4% and the previous value of 4.6%. The statistics were taken positively by investors and contributed to strengthening the position of the Japanese yen.
Today, the publication of nonfarm payrolls for November in the US at 15:30 (GMT+2) is expected to reach 200.0K. If the actual value turns out to be equal to or lower than the forecast, then the USD/JPY pair may continue to decline.
The long-term trend reversed downwards. The quotes broke the key support level of 139.00 and reached 135.00. In case of a breakdown, a further decline with the targets at 132.00 and 130.00 is possible. Traders should pay attention to the readings of the RSI indicator, which is approaching the oversold area of the market, signaling a possible development of a corrective pattern in the short term.
The medium-term trend is downwards. This week, market participants broke the target zone 3 (137.55–137.10), and the next sell target was zone 4 (133.02–132.59), after reaching which large traders may close profitable short positions and correct the price. The key resistance of the trend is shifting to 140.15–139.68, and in case of a correction to this area, sales may be opened with the target at the current week's low at 135.15.
Resistance levels: 139.50, 142.50. | Support levels: 135.00, 132.00, 130.00.