Current trend

Against the stable dynamics of the American currency, the USD/JPY pair is correcting, trading around 149.11.

The yen is trying to stay below the record high of 150.00, hampered by the strong American dollar. In addition, Japan’s September corporate goods price index, released today, fell 0.3% after rising 0.3% earlier, bringing the rate down to 2.0% YoY from 3.3%. Core orders in mechanical engineering adjusted by –0.5% in August against forecasts of 0.4% and by –7.7% YoY, better than –13.0% in July. The September volume of bank lending increased by 2.9% instead of 3.1% previously, which may indicate a decrease in demand for loans from enterprises.

The American dollar is developing negative dynamics this week, trading at 105.000 in the USD Index and not reacting to the published minutes of the September meeting of the US Federal Reserve since the main theses of the document were already made public during speeches by the heads of regional Federal Reserve Banks Raphael Bostic and Philip Jefferson. The producer price index increased by 0.5% in September, which caused an increase of 2.2% YoY compared to preliminary estimates of 1.6%.

Support and resistance

On the daily chart, the trading instrument is moving within an ascending corridor with dynamic boundaries of 151.90–144.40.

Technical indicators maintain a buy signal, despite the local correction: fast EMA on the Alligator indicator are above the signal line, and the AO histogram forms corrective bars in the buy zone.

Resistance levels: 150.20, 151.90.

Support levels: 148.30, 146.30.

Trading tips

Long positions may be opened after the price rises and consolidates above 150.20 with the target at 151.90. Stop loss – 149.50. Implementation period: 7 days or more.

Short positions may be opened after a reversal, decline, and consolidation of the price below 148.30 with the target at 146.30. Stop loss – 149.50.