Current trend

The USD/JPY pair is trading mixed, holding near 144.70, the high from September 4. Market activity remains subdued amid a lack of data from Japan, while US investors brace for August Durable Goods Orders data due out today.

Analysts expect the indicator to slow down sharply by 2.6% after rising 9.8% in the previous month, while the index excluding transport could add 0.1% after –0.2%. Also, during the day, annual data on US Gross Domestic Product (GDP) for the second quarter will be presented: no changes from the previous increase of 3.0% are expected. In addition, today there will be speeches by representatives of the US Federal Reserve, including the Chair of the regulator, Jerome Powell, who may clarify the prospects for the expected adjustments to the interest rate by the end of 2024. The market is counting on two more cuts in borrowing costs by 25 or 50 basis points in November and December.

Japan will release Tokyo-area inflation data on Friday, with the Consumer Price Index excluding Fresh Food forecast to fall to 2.0% in September from 2.4%. Such a significant slowdown could put pressure on the Bank of Japan to further tighten monetary policy.

Japan's leading indicator of service sector inflation held steady at 2.7% in August, data showed on Wednesday, underscoring the regulator's view that rising wages are encouraging companies to pass on higher labor costs to consumers by raising their selling prices. Bank of Japan Governor Kazuo Ueda said on Tuesday that the regulator has time to assess market and economic conditions before making any policy adjustments, signaling that there is no immediate need to raise interest rates again. The official also noted that the real indicator remains deeply negative, which helps stimulate the economy and control inflation. The Bank of Japan has already raised borrowing costs twice this year, and is currently holding the rate at around 0.25%.

Support and resistance

On the daily chart, Bollinger Bands demonstrate a tendency to reverse into an ascending plane. The price range expands from above, freeing a path to new local highs for the "bulls". MACD grows, preserving a stable buy signal (located above the signal line). Stochastic retains a steady uptrend, but is located in close proximity to its highs, which points to the risk of overbought US dollar in the ultra-short term.

Resistance levels: 145.00, 146.00, 147.00, 148.21.

Support levels: 144.00, 143.35, 142.50, 141.76.

Trading tips

Long positions can be opened after a breakout of 145.00 with the target of 147.00. Stop-loss — 144.00. Implementation time: 2-3 days.

A rebound from 145.00 as from resistance, followed by a breakdown of 144.00 may become a signal for opening of new short positions with the target at 142.50. Stop-loss — 145.00.