Current trend

The USD/JPY pair is correcting within a sideways trend around 154.72 amid a slowdown in the growth of the American currency.

It seems that the Bank of Japan does not intend to intervene in the market situation. However, some experts believe that Friday’s decline was due to a local intervention, which was immediately bought back. The regulator previously made a historic decision and abandoned the policy of negative interest rates, adjusting the value of −0.1% to 0.0–0.1%. However, the department representatives note that further monetary policy will stay soft, given the signs of slowing inflation.

As for the possible support of the yen from ordinary investors, it may arise against positive macroeconomic reports. The April manufacturing PMI amounted to 49.9 points, higher than 48.2 points previously, and the services PMI increased from 54.1 points to 54.6 points. Statistics on consumer inflation in Japan for March disappointed the market: at the end of March, the national consumer price index decreased from 2.8% to 2.7%, and the national consumer price index excluding prices for fresh food and energy – from 3.2 % to 2.9%. On Friday, April consumer price dynamics in the Tokyo region will be presented, and the Bank of Japan will also hold a meeting on monetary policy.

The American dollar is moving sideways at 105.90 in USDX in anticipation of today’s macroeconomic statistics, which could increase the volatility of the currency. At 15:45 (GMT 2), reports on business activity will be published. According to forecasts, the April manufacturing PMI will increase from 51.9 points to 52.0 points, and the services PMI from 51.7 points to 52.0 points. At 16:00 (GMT 2), investors will pay attention to March new home sales volumes, which may increase from 662.0K to 668.0K.

Support and resistance

On the daily chart, the trading instrument is moving within the ascending corridor of 157.00–151.00, forming a growth wave.

Technical indicators are holding a buy signal: fast EMA on the Alligator indicator are above the signal line, and the AO histogram is forming ascending bars in the positive zone.

Resistance levels: 155.10, 156.80.

Support levels: 153.90, 151.80.

Trading tips

Long positions may be opened after the consolidation above 155.10, with the target at 156.80. Stop loss – 154.30. Implementation period: 7 days or more.

Short positions may be opened after the consolidation below 153.90, with the target at 151.80. Stop loss – 154.70.