FX.co ★ USD/JPY

The US Dollar (USD) gains against the Japanese Yen (JPY) in the opening session of the European market on Monday, although it still holds below the lower end of its three-week trading range as traders wait for critical central bank meetings later in the week. The USD/JPY currency pair has gained support at the 156.00 mark, although it seems unable to break through resistance above the 157.00 mark. In the case of the Bank of Japan (BoJ), there will be no change in the benchmark interest rate, which remains steady at 1.25%, and a higher rate will be anticipated in December. Previously, there was also an expectation that the Fed will maintain a rate-hike stance as well, despite Chairman Kevin Warsh's dislike of forward guidance, which will keep the future rate stance in the fog for the central bank. In such a situation, the US Personal Consumption Expenditures Price Index, which is due next week, will be more illuminating.

The USD/JPY pair stands at 157.13, making an attempt at a fragile upward move. Still, given the readings of momentum indicators on 4-hour charts, we can assume that the current market is characterized by neutrality. Indeed, both the RSI (14) and MACD indicator show readings in favor of bulls, although the latter indicator's line hovers around its zero line. For upward attempts, the nearest resistance level will be 157.20 – 157.50 (the previous support area that has worked several times for the bears during October). The next resistance levels will be the October 21 high at 158.40 and the upper bound of the range at the 159.00 area. As for the support levels, the breakdown of the 156.10 - 156.40 area (September 29 and October 23 lows) will allow the bears to target the September 17 low at 155.35.