Current Trend
The USD/JPY pair is showing a slight decline, currently trading at 146.18, retreating from the local high of 148.25 reached on August 2. The US dollar is attempting to regain its lost position amid a wave of selling due to increased risks of reduced borrowing costs in the US.
The labor market report released last weekend showed nonfarm payrolls decreasing from 179,000 to 114,000, below the expected 175,000. Average hourly earnings slowed from 0.3% to 0.2% month-over-month and from 3.8% to 3.6% year-over-year, while the unemployment rate rose from 4.1% to 4.3%. This led market participants to anticipate the Federal Reserve (FRB) might reduce borrowing costs in September, with many experts predicting a 50 basis points adjustment.
Conversely, the Bank of Japan (BoJ) is gradually raising interest rates due to increasing inflationary pressures. A meeting was held yesterday to calm the markets. Deputy Governor Shinichi Uchida stated in a speech to business leaders in Hakodate that if recent strong market fluctuations impact economic and price forecasts, the course of monetary policy adjustments might change. This contrasts with the "hawkish" comments made by BoJ Governor Kazuo Ueda last week, which led to a rate hike from 0.10% to 0.25%, causing a surge in the NI 225 index and a sharp decline in the yen.
Today's macroeconomic statistics from Japan were mixed. Bank lending grew by 3.5% in July, aligning with analyst forecasts, while the Eco Watchers Current Conditions Index slightly rose from 47.0 to 47.5 points, falling short of the preliminary estimate of 47.8 points. Meanwhile, the outlook was adjusted from 47.9 to 48.3 points.
Support and Resistance
The daily chart's Bollinger Bands show a stable downward trend, with the price range narrowing, providing sufficient breadth for current market activity. The MACD indicator is reversing to growth, attempting to form a new buy signal as the histogram consolidates above the signal line. Similarly, the Stochastic indicator is rebounding from lows, indicating a risk of oversold conditions for the US dollar in the ultra-short term.
- Resistance Levels: 147.00, 147.90, 149.50, 150.50
- Support Levels: 146.00, 145.00, 144.00, 143.35
Trading Plans
- Short Positions: Can be opened after a breakthrough of 146.00, targeting 144.00. Stop loss at 147.00. Duration: 1-2 days.
- Long Positions: New long positions can be opened after a rebound from 146.00 and a breakthrough of 147.00, targeting 149.50. Stop loss at 146.00.
