Current trend

The USD/JPY pair is declining slightly, retreating from record highs, once again updated the day before. The instrument is again trading above the psychological level of 160.00, while only in late April-early May the Bank of Japan directed about 62.0 billion dollars for foreign exchange interventions to support the exchange rate of the national currency, and states that it is ready to take action again in case of excessive volatility, but strong. The dollar's position, as well as high borrowing costs in the US, act as a barrier to a potential strengthening of the yen. There is now a distinct possibility that the Japanese regulator will announce an additional interest rate hike at the end of July if inflation in the country continues to rise moderately, but some analysts doubt that this will be enough. To change the trend in the USD/JPY pair, it is necessary for the US Federal Reserve to begin easing monetary policy, but a change in the Fed’s rhetoric should not be expected until September.

Meanwhile, the Japanese currency is being moderately supported by macroeconomic statistics today: Retail Sales volumes in annual terms in May added 3.0% after growing by 2.0% with neutral forecasts, and in monthly terms — from 1.2% to 1.7%, while Large Retailer Sales accelerated from 3.0% to 4.0%.

With the opening of the American session, the focus of investors' attention will shift to statistics from the United States. At 14:30 (GMT 2) the final data on Gross Domestic Product (GDP) for the first quarter will arrive on the market: the figure is expected to be revised from 1.3% to 1.4%. Also, during the day, data on Durable Goods Orders and Jobless Claims will be published: Initial Jobless Claims for the week ended June 21 is likely to decrease from 238.0 thousand to 236.0 thousand, and Continuing Jobless Claims (for the week ended June 15) — from 1.828 million to 1.820 million.

Support and resistance

Bollinger Bands on the daily chart show a steady increase. The price range is expanding but it fails to conform to the development of "bullish" sentiments at the moment. MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic, having reached its peak values the previous week, is reversing into a descending plane, signaling in favor of the development of a correctional decline in the ultra-short term.

Resistance levels: 160.80, 161.30, 162.00, 162.50.

Support levels: 160.21, 159.92, 159.30, 159.00.

Trading tips

Short positions may be opened after a breakdown of 160.21 with the target at 159.00. Stop-loss — 160.80. Implementation time: 1-2 days.

A rebound from 160.21 as from support followed by a breakout of 160.80 may become a signal for opening new long positions with the target at 162.00. Stop-loss — 160.21.