USD/JPY: the pair declines again

Current trend

The USD/JPY pair declined amid negative investor reaction to the US Federal Reserve's decision, trading at 105.00.

Today, the Bank of Japan kept its course, chosen back in 2016, and kept the interest rate at –0.10%. In an explanatory letter, the regulator noted that it will continue to purchase Japanese government bonds so that the yield on 10-year JGB will remain near the zero level. The bank will begin to actively acquire ETFs and real estate in Japan, as well as investment trusts. The volume of corporate bonds in circulation will remain at 3 trillion yen. In general, the decision is absolutely expected, which has hardly influenced the market so far.

Last night, the US Federal Reserve decided to keep the current monetary policy unchanged, and the interest rate remained at 0.25%. FOMC forecasts for economic performance in the future did not instill optimism in the market. The level of real GDP by the end of the year is expected to be no higher than –3.7%, and the unemployment rate will drop below 7.6%.

Support and resistance

The pair exited the local Triangle pattern and declines within the next downward wave within the global channel. Technical indicators issued a new sell signal. Alligator indicator’s EMA fluctuations range began to expand downwards, and the histogram of the AO oscillator moved into the negative zone.

Resistance levels: 105.40, 106.90.

Support levels: 104.70, 103.00.

Trading tips

After decline or consolidation below the local minimum at 104.70, sell positions with the target at 103.00 become relevant. Stop loss is 105.20, above the resistance level.

After reversal and growth or consolidation above the local resistance at 105.40, buy positions with the target at 106.90 become relevant. Stop loss is 105.00.

Implementation period: 7 days or more.