On Wednesday, USD/JPY is in a short-term downtrend and is trading at 154.58, which investors see as a correction due to currency interventions by the Bank of Japan.
Japan's macroeconomic data remains weak. The core consumer price index remained at 2.1% compared to the same indicator a year earlier. The index of business activity in the manufacturing sector in July decreased from 50.0 points to 49.2 points, and in the services sector increased from 49.4 points to 53.9 points. Experts believe that the weakness of the yen is causing concern among Japanese politicians who are trying to put pressure on the Central Bank to increase the cost of borrowing. However, most likely, at the July 31 meeting, interest rates will remain unchanged, and the adjustment of monetary policy will be postponed to the autumn.
The dollar index is trading at 104.10, almost unresponsive to the June report on sales in the secondary housing market, which showed a decrease from -0.7% to -5.4%, which corresponds to an annual minimum. Today at 16:00 (GMT+2), new home sales data will be published, which is an important indicator of the American construction market. A correction is expected from 619.0 thousand to 639.0 thousand earlier.
Technical analysis indicators indicate a sale. The averages on the alligator indicator have adjusted downwards and are opened correctly, and the awesome oscillator forms descending (red) bars in the sales area.
We will open short positions after the price decreases and fixes below the key level of 154.10. We consider 151.80 as the target. We will place the stop loss at 155.50.
In case of a breakout of resistance with subsequent growth of the asset, we wait for the price to consolidate above 155.40 and open purchases with a target of 157.70. We will place a stop loss at 154.00.