Current trend

The quotes of the USD/JPY pair are adjusting in an uptrend around 157.79.

Macroeconomic statistics from Japan, published today, did not support the yen: exports increased by 13.5%, higher than the April dynamics of 8.3% and forecasts of 13.0%, confirming the acceleration of output by the industrial sector, while imports adjusted from 8.3% to 9.5% with expectations of 10.4%. Against this background, the trade deficit increased from ˗465.6 billion yen to ˗1.221 trillion yen, and the seasonally adjusted figure rose to ˗0.62 trillion yen from ˗0.58 trillion yen. The national economy remains under pressure, and now investors are waiting for further steps by the monetary authorities: some of them are confident that during the July meeting, officials will take a wait-and-see position to assess the measures already taken to adjust the interest rate, keeping the indicator within the range of 0.00-0.10%. Earlier, the head of the Bank of Japan, Kazuo Ueda, allowed an increase in the cost of borrowing in the summer, since the weakness of the national currency leads to an increase in import costs, stressing that the main focus of decision-making will be on economic data.

In turn, the US dollar continues to move in a sideways trend, and the USDX quotes are held around 104.90. Investors reacted negatively to yesterday's retail sales data, according to which the base index excluding car sales decreased by 0.1%, continuing the negative trend of the previous period. Despite this, retail sales increased 0.1% after -0.2% earlier, while analysts expected 0.3%.

Support and resistance

On the D1 chart, the price remains within the ascending channel of 161.00–156.40, moving away from the support line.

Technical indicators are holding the buy signal, which is still strengthening: the fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram, being in the purchase zone, forms new ascending bars. 

Support levels: 157.30, 154.80.

Resistance levels: 158.30, 160.20.

Trading tips

After the breakout of the resistance level and the continued growth of the asset, as well as consolidation above the 158.30 mark, buy positions with the target of 160.20 will become relevant. Stop-loss – 157.30. Implementation period: 7 days or more.

In the event of a reversal and continued decline of the asset, as well as price consolidation below the 157.30 mark, one may open sell positions with the target of 154.80. Stop-loss – 158.00.