Current trend

During the Asian session, the USD/JPY pair is testing 147.40 for a breakout, developing the “bullish” momentum formed at the beginning of the week.

Positive dynamics are developing against weakening market participants’ expectations regarding a change in the US Federal Reserve’s monetary policy during the March meeting, as well as poor macroeconomic statistics from Japan. Thus, the Tankan business confidence index in January amounted to 6.0 points, much lower than the forecast of 11.0 points and the previous value of 12.0 points. The indicator evaluates economic conditions from a business perspective, and a reduction in the indicator leads to a weakening of the yen.

The long-term trend remains downward, and since January 2, a correction has been developing, within which the price has reached the resistance level of 147.77. If it holds, short positions with the first target at the support level of 145.33 are relevant, and if it breaks through, the quotes will be able to reach the trend border around 149.63.

Last week, the medium-term trend reversed upwards after breaking through zone 144.88–144.46, and zone 2 (149.38–148.93) became the purchase target. If, as part of the correction, the quotes reach the trend border around 143.52–143.11, long positions with the first target at the current week’s high of 147.90 are relevant, and after breaking through zone 2, the price may reach zone 3 (154.17–153.70).

Support and resistance

Resistance levels: 147.77, 149.63, 151.79.

Support levels: 145.33, 140.80.

Trading tips

Short positions may be opened below 147.77 with the target at 140.80 and stop loss around 149.63. Implementation time: 9–12 days.

Long positions may be opened above 149.63 with the target at 151.79 and stop loss around 148.73.