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USDJPY Market Update

11/24/2022 11:07 AM

The US dollar shows a moderate decline against the yen in Asian trading, developing the "bearish" momentum formed last Tuesday, when the USD/JPY pair was near local highs of November 11.

The October minutes of the US Federal Reserve meeting exert significant pressure on the positions of the US currency. As expected, department officials signaled an upcoming slowdown in interest rate hikes. Experts predict an adjustment of the value of only 50.0 basis points in December, but this will be the seventh increase in a row. Representatives of the regulator, in turn, say that it is premature to talk about the beginning of the end of the monetary policy tightening cycle since consumer price dynamics remain extremely high.

The American macroeconomic statistics released yesterday did not support the position of the national currency. However, the markets drew attention to a noticeable increase in the volume of durable goods orders: in October, it added 1.0%, while analysts expected only 0.4%. Durable goods orders, excluding the defense and aviation sectors, rose by 0.7% after falling by 0.8% last month. Traders noted the dynamics of new home sales: in October, the figure corrected by 7.5% after a sharp decline of 11.0% last month, although preliminary estimates suggested a decline of 3.8%.

On the daily chart, Bollinger bands show a steady decline as the price range narrows, reflecting the ambiguous nature of trading in the short term. MACD reversed to a downward plane, forming a new sell signal (the histogram is below the signal line). Stochastic shows more active downward dynamics. However, at the moment, it is rapidly approaching its lows, indicating that the US dollar may become oversold in the ultra-short term.

Resistance levels: 139.90, 140.79, 141.50, 142.54. | Support levels: 138.50, 137.50, 136.50, 135.57.

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