Current trend

The USD/JPY pair is developing an upward trend in the short and medium term, updating record highs. Quotes are testing 155.65 for a breakout, while investors are preparing for today's publication of macroeconomic statistics on US Gross Domestic Product (GDP) for the first quarter. The American economy is predicted to slow down from 3.4% to 2.5%, which may put pressure on the US Federal Reserve in choosing the vector of further monetary policy. Also, today at 14:30 (GMT 2), data on Jobless Claims will be presented, and at 16:00 (GMT 2) – March statistics on Pending Home Sales, forecasts for which suggest a sharp slowdown in dynamics from 1.6% to 0.3%.

Macroeconomic data published today in Japan did not provide significant support to the yen: the Leading Economic Index in February remained at the same level of 111.8 points, as analysts predicted, and the Coincident Index adjusted from 110.0 points to 111.6 points. Tomorrow at 01:30 (GMT 2), trading participants will pay attention to the report on inflation in the Tokyo region, which will precede a meeting of the Bank of Japan, where officials are likely to discuss the rapid weakening of the national currency and its impact on rising consumer prices. Experts believe that borrowing costs will be maintained at the current level of 0.00%–0.10%, since in March the regulator adjusted monetary policy parameters for the first time since 2006, and also suspended yield curve control, the goal of which was to maintain the indicator on 10-year Japanese government bonds near zero. In a monthly survey published by QUICK, 22.0% of respondents predicted that the next interest rate hike would occur in October, 18.0% pointed to September, and only 2.0% predicted another adjustment in April.

Support and resistance

Bollinger Bands on the daily chart show a steady increase. The price range changes slightly, but clears the way for the "bulls" to new record highs. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic, having reached its highs, reversed into a horizontal plane, indicating significant risks of overbought American currency in the ultra-short term.

Resistance levels: 156.00, 156.50, 157.00, 157.50.

Support levels: 155.50, 155.00, 154.50, 154.00.

Trading tips

Long positions can be opened after a breakout of 156.00 with the target of 157.00. Stop-loss — 155.50. Implementation time: 2-3 days.

A rebound from 156.00 as from resistance, followed by a breakdown of 155.50 may become a signal for opening of new short positions with the target at 154.50. Stop-loss — 156.00.