Current trend

Amid poor Japanese macroeconomic statistics, the USD/JPY pair is correcting in an upward trend at 158.38.

Tomorrow at 01:30 (GMT 2), the national core consumer price index is due. The forecast assumes that the May indicator will rise from 2.2% to 2.6%, acting as a signal for the Bank of Japan to adjust monetary parameters. Based on preliminary estimates, it can be assumed that the overall value will be even higher since oil prices have been increasing for more than a month, and the purchasing power of households remains insufficient. Thus, the volume of exports corrected from 8.3% to 13.5% relative to the expectations of 13.0%, and imports – from 8.3% to 9.5%, below the expected 10.4%. Against this background, the trade deficit accelerated from –465.6B yen to –1.221T yen, while experts expected –1.300T yen.

The American dollar is moving within a corrective sideways trend, holding at 104.90 in USDX. Investors took yesterday’s report on the lending market neutrally, as it did not reflect significant changes. The currency is supported by the first reduction since April in the 30-year mortgage rate from 7.02% to 6.94% by the Mortgage Loan Association (MBA), as a result of which the market index strengthened from 208.5 points to 210.4 points, and the indicator of mortgages applications from 143.7 points to 146.0 points.

Support and resistance

On the daily chart, the trading instrument moves within the ascending channel 161.00–156.40, retreating from the support line.

Technical indicators are holding the buy signal: fast EMA on the Alligator indicator are moving away from the signal line, and the AO histogram is forming ascending bars in the buy zone.

Resistance levels: 158.47, 160.20.

Support levels: 157.60, 154.80.

Trading tips

Long positions may be opened after the price rises and consolidates above 158.47, with the target at 160.20. Stop loss — 157.30. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 157.60, with the target at 154.80. Stop loss — 158.20.