Solid News
USDJPY Upside Potential for the Asset Price is Limited
12/16/2022 1:46 PMAfter the decision of the US Federal Reserve to slow down the pace of raising interest rates to 50.0 basis points, the USD/JPY pair added 2.3% in value, reaching 138.05, for the breakout of which the market needs a new movement driver.
This week, the statistics recorded an increase in Tankan's index of sentiment for large non-manufacturing companies for the fourth quarter from 14.0 points to 19.0 points against a forecast of 17.0 points, while Services PMI for November was at 51.7 points, which is higher than the forecast of 51.1 points and the previous value of 50.3 points. Also, the volume of exports grew by 20.0%, more than expected by experts, by 19.8%, and imports – by 30.3%, exceeding forecasts of 27.0%.
Thus, strong Japanese macroeconomic data hold back further growth of the trading instrument and maintain a long-term downtrend. An important resistance level is 138.05, and while the price is below it, it is worth considering short positions with the targets at 135.00 and 133.90, and the breakdown of 133.90 in the long term will open the way for a further decline to the 130.90 area.
The medium-term trend remains downward. This week, the quotes corrected the trend's key resistance area at 138.66–138.20. The zone has been held, so selling with the target at the December low of 133.70 remains in priority, with zone 4 (133.02–132.59) being the second target. An alternative scenario assumes a breakdown of the key resistance and the price consolidation above it, and then the medium-term trend will change to an uptrend, and zone 2 (143.59–143.10) will be the target for purchases.
Resistance levels: 138.05, 139.50, 142.00. | Support levels: 135.00, 133.90, 130.90.
