Current trend

Against the stable dynamics of the American currency, the USD/JPY pair is correcting, trading around the level of 149.20.

After a sharp decline on October 3, caused, according to some experts, by the Bank of Japan’s intervention in the market, the price has reversed upwards. The August household spending index, released on Friday, rose 3.9% after falling 2.7% earlier, pushing the index up from –5.0% to –2.5% YoY. However, these statistics are not enough to influence the yen’s performance, and the USD/JPY pair will likely continue to rise, approaching last year’s high.

The American dollar is trading slightly above 106.000 in the USD Index, supported by positive statistics on the labor market: the unemployment rate in September remained at 3.8%, helped by an increase in the number of people employed in the non-agricultural sector from 227.0K to 336.0K and an increase indicator in the non-agricultural private sector from 177.0K to 263.0K. In addition, the number of jobs in the manufacturing industry adjusted by 17.0K compared to 11.0K previously.

Support and resistance

On the daily chart, the trading instrument is moving within an ascending corridor with dynamic boundaries of 151.90–143.20.

After a local correction, technical indicators strengthen the buy signal: fast EMAs on the Alligator indicator move away from the signal line, and the AO histogram forms corrective bars in the buy zone.

Resistance levels: 150.10, 151.90.

Support levels: 148.30, 146.40.

Trading tips

Long positions may be opened after the price rises and consolidates above 150.10 with the target at 151.90. Stop loss – 149.50. Implementation period: 7 days or more.

Short positions may be opened after the price declines and consolidates below 148.30 with the target at 146.40. Stop loss – 149.50.