Current trend

The USD/JPY pair is adjusting in a sideways trend at 149.33 amid the neutral dynamics of the American dollar and poor expectations of a tightening of the Bank of Japan’s monetary policy at the meeting on October 31.

According to most experts, officials will deviate from the previously announced plan to bring the interest rate to 1.00% by the end of the year and leave it at 0.25%. It is confirmed by the comments of the head of the regulator, Kazuo Ueda, who said it was necessary to take a break and carefully study the results of the measures taken and the possible risks of increased volatility. Inflation statistics support the interest rate maintaining: the September national core consumer price index slowed from 2.8% to 2.4%.

The Friday’s American dollar’s decline was the strongest since late September, and the asset is holding at 103.30 in USDX amid a weakening real estate sector. The September housing starts fell by 0.5%, from 1.361M to 1.354M, interrupting a two-month upward trend, and the building permits fell by 2.9%, from 1.470M to 1.428M, reflecting a new negative trend in the sector after positive data at the end of summer.

Support and resistance

On the daily chart, the trading instrument is correcting upwards as part of working out the exit from the downward channel 145.00–139.00.

Technical indicators are holding the buy signal: fast EMAs 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: 150.20, 154.10.

Support levels: 148.30, 143.90.

Trading tips

Long positions may be opened after the price rises and consolidates above 150.20, with the target at 154.10. Stop loss — 149.00. Implementation period: 7 days or more.

Short positions may be opened after the price falls and consolidates below 148.50, with the target at 143.90. Stop loss — 150.00.