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The US dollar is noticeably declining in tandem with the Japanese yen, returning to the lows of the beginning of the week and testing the level of 131.50 for a breakdown. Traders are closing a few long positions on the US currency ahead of the release of December data on consumer inflation, hoping to receive new evidence of a slowdown in prices in late 2022, which will help soften the "hawkish" rhetoric of the US Federal Reserve regarding further interest rate hikes.

Additional support for the Japanese currency is provided by macroeconomic statistics published in Japan today. Current Account without seasonal adjustments in November showed an increase to 1803.6 billion yen, while a month ago, experts fixed its deficit at 64.1 billion yen. Eco Watchers Outlook in December increased from 45.1 points to 47.0 points, while the Current Situation index decreased from 48.1 points to 47.9 points. In addition, the Tokyo Core Consumer Price Index corrected from 3.8% to 4.0% in December, the fastest rise in four decades, indicating that nationwide consumer inflation is likely to remain above its target in 2.0% in December. In turn, this will support market confidence that the Bank of Japan can phase out large-scale stimulus to the national economy by changing its policy of yield control.

Bollinger Bands in D1 chart demonstrate a weak decrease. The price range practically does not change, remaining spacious enough for the development of corrective dynamics for the instrument in a downward plane. MACD is trying to reverse downwards keeping a buy signal (located above the signal line). Stochastic shows a more confident decline, quickly approaching its lows, indicating the risks of oversold US dollar in the ultra-short term.

Resistance levels: 132.00, 133.00, 133.61, 134.50. | Support levels: 131.00, 130.00, 129.00, 128.00.