Current trend

The USD/JPY pair is holding at 150.70, recovering from a sharp corrective decline the day before. The position of the American currency came under pressure after the publication of October statistics on consumer inflation, which slowed down more than analysts had projected.

The Consumer Price Index fell from 0.4% to 0.0% in monthly terms, while analysts expected 0.1%, and in annual terms the figure dropped from 3.7% to 3.2% with a forecast of 3.3%. The weakening of price pressure confirmed investors' assumptions about the likely imminent completion of the current cycle of adjustment of borrowing costs by the US Federal Reserve and a reduction in interest rates as early as 2024. However, the consolidated forecast currently suggests that this process may not begin until June or July next year.

Statistics from Japan put pressure on the yen's position: Gross Domestic Product (GDP) in the third quarter amounted to -0.5% after growing by 1.2% in the previous period, while experts expected -0.1%, and in annual terms the national economy lost 2.1% after expanding by 4.8%, with expectations at -0.6%. Meanwhile, Industrial Production in September increased from 0.2% to 0.5% on a monthly basis and from -4.6% to -4.4% on an annual basis.

Japanese Finance Minister Shunichi Suzuki said yesterday that the government will take the necessary measures to respond to changes in the yen exchange rate, emphasizing that excessive fluctuations in quotations are extremely undesirable, but they must be established by the market taking into account fundamental indicators. Therefore, authorities will continue to monitor incoming data and respond to changes accordingly. However, the minister did not say whether the government intends to carry out additional interventions. Officials are already taking steps to support households pressured by rising costs of living due to higher import prices for fuel and food.

Support and resistance

Bollinger Bands in D1 chart show unsteady growth. The price range is narrowing from below, reflecting the emergence of ambiguous dynamics of trading in the short/ultra-short term. MACD reversed downwards having formed a new sell signal (located below the signal line). Stochastic is showing more stable decline and is located in the middle of its area.

Resistance levels: 151.00, 151.50, 152.00, 152.50.

Support levels: 150.50, 150.00, 149.69, 149.30.

Trading tips

Long positions can be opened after a breakout of 151.00 with the target of 151.50. Stop-loss — 150.65. Implementation time: 1-2 days.

The return of a "bearish" trend with the breakdown of 150.50 may become a signal for new short positions with the target at 150.00. Stop-loss — 150.75.