Current trend

Against the positive dynamics of the American currency, the USD/JPY pair is correcting at 143.91.

On Monday, the Bank of Japan released a traditional summary of opinions, according to which analysts predict the yen’s outlook for the near term. The general mood of the regulator’s officials is neutral: most are confident in the need to maintain an ultra-soft monetary policy and keep the interest rate at –0.10%. By the middle of the year, inflation is expected to slow down but further prospects are not yet clear and will depend on the global dynamics of consumer prices. Despite the correction in the cost of raw materials, the industry still faces difficulties in implementation, which is reflected in the increase in selling prices, increasing the burden on households.

Yesterday, the US dollar strengthened and is now trading at 102.200 in the USD Index. The number of building permits issued in the United States increased from 1.417M to 1.496M, higher than the forecasted 1.491M, and new home sales amounted to 763.0K against 680.0K earlier, surpassing the expected 675.0K. Thus, the recovery of the real estate market may provide significant support to the dollar, which looks much more confident than the poor yen.

Support and resistance

On the daily chart, the trading instrument is holding above the resistance line of the ascending corridor with dynamic boundaries 142.50–135.30.

Technical indicators reinforce the buy signal: fast EMAs on the Alligator indicator stays above the signal line, and the AO histogram forms rising bars in the buying zone.

Resistance levels: 144.90, 147.50.

Support levels: 142.48, 139.60.

Trading tips

Long positions may be opened after the price rises and consolidates above 144.90 with the target at 147.50. Stop loss – 144.00. Implementation period: 7 days or more.

Short positions may be opened after a reversal, reduction, and consolidation of the price below 142.48 with the target at 139.60. Stop loss – 143.20