USD/JPY strengthened slightly on Monday, trying to break above the key resistance of 145.50. The dollar is supported by the US labor market report published on Friday which allows the Fed to continue its aggressive tightening of the monetary policy.
The Bank of Japan has a wait-and-see attitude and does not plan to raise rates yet, despite some "hawkish" statements from monetary authorities. At the same time, the central bank is worried about the low yen rate and does not rule out supporting the national currency with additional interventions. The regulator has already carried out such an operation in September, but the effect was short-lived and USD/JPY soon returned to record highs.
Some support for the yen is provided by Japanese statistics. In particular, the index of leading indicators rose from 98.9 to 100.0 pips and the index of coinciding indicators from 100.1 to 101.7 pips.
Technical analysis for USD/JPY
The major forex indicators are turning upward, though the CCI indicator and Bollinger Bands have noticeably lowered the angle of approach, while the MACD gives a rather weak buy signal. The oscillator stochastic from the bottom up has broken through the overbought area boundary (80%) and is in the zone of maximum values.
After breakdown of the key resistance at 146.00, we are going back to buy USD/JPY, with Take Profit at 148.00. Protective stop loss is taken out at 145.00.
In case of a rebound from 146.00, wait for the price to settle below the level of 145.00, and only after that form short positions towards 143.50. Stop-loss is set at 145.80.
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