Current trend

The USD/JPY pair is developing the upward momentum formed yesterday and is actively testing 146.05.

The consumer price index in Tokyo YoY fell from 3.2% to 2.9% against the forecast of 3.2%, and the base value – from 3.0% to 2.8% against 2.9%, supporting the current “dovish” rate of the Bank of Japan: the interest rate is still in the negative zone and amounts to –0.10%. In turn, the cost of borrowing by the US Federal Reserve reached 5.50%, and against opposite approaches to conducting monetary policy, the pair USD/JPY in the long term is likely to continue to grow to last year’s high at 151.75.

Investors are looking forward to the speech of the head of the US Federal Reserve Jerome Powell at the symposium in Jackson Hole at 16:05 (GMT 2), which will comment on the current economic situation and monetary policy. If the official hints at an increase in the cost of borrowing, then the dollar will strengthen but if the main focus is on discussing a possible decrease in the indicator, then the dollar is likely to fall to 99.400 in the USD Index.

Support and resistance

The long-term trend is upward: the trading instrument has overcome the June high of 144.75, which has become support. The growth target is 148.75, after reaching which a correction may develop. The RSI indicator is approaching the overbought area but does not enter it, and if the indicator line reaches the value of “70” or higher soon, it will be possible to consider selling transactions against the trend.

The medium-term trend is up with the target in zone 2 (148.53–147.96), and long positions should be opened from the key trend support area 141.10–140.58 with the first target at the August high of 146.50.

Resistance levels: 148.75, 151.75.

Support levels: 144.75, 141.70, 138.70, 137.63.

Trading tips

Long positions may be opened from 141.70 with the target at 148.75 and stop loss around 139.65. Implementation period: 9–12 days.

Short positions may be opened below 139.65 with the target at 137.30 and stop loss around 140.70.