Current Trends
The USD/JPY pair is trading around 153.65. The yen is maintaining a stable level, supported by neutral macroeconomic statistics in the current situation.
The Consumer Price Index (CPI) for the Tokyo region adjusted to 2.3% year-over-year, with the core CPI, which excludes fuel and food, rising from 2.1% to 2.2%. The Corporate Service Price Index increased from 2.7% to 3.0%, exceeding the expected 2.6%. This significant increase in service provision costs between companies suggests that high inflation may continue, potentially prompting the Bank of Japan to tighten monetary policy. According to Reuters, regulators are expected to discuss the possibility of such measures at the July 31 meeting. Meanwhile, Japan's monthly government report indicates that while the domestic economy is recovering, the growth rate of exports is slowing, which could negatively impact the Gross Domestic Product (GDP).
On the other hand, the US dollar is in a corrective trend in the 104.00 area on the USDX. The dollar has shown little reaction to macroeconomic indicators, as traders await new signals amid high domestic tension in the US. The previous day, President Joe Biden explained to the public the reasons for his withdrawal from the election and stated that he would continue his duties until the end of his term. Under this backdrop, the GDP report, indicating the domestic economy grew from 1.4% to 2.8% in the second quarter, and the decrease in initial jobless claims from 245,000 to 235,000 received little attention.
Support and Resistance
On the daily chart, the price continues to move below the boundaries of the multi-month upward channel in the range of 163.00–156.00.
Technical indicators maintain stable sell signals, with the fast EMA of the Alligator indicator significantly below the signal line, and the AO Oscillator histogram forming descending bars in the sell zone.
- Support Levels: 153.00, 150.80
- Resistance Levels: 154.70, 157.70
Trading Advice
- Short Positions: Open positions targeting 150.80 if the price falls below the local support level of 153.00. Set a stop loss at 154.00. Duration: Over 7 days.
- Long Positions: Consider buying positions targeting 157.70 if the price exceeds the resistance level of 154.70 and continues to grow. Set a stop loss at 153.00.
