Current trend
The US dollar shows flat dynamics in Asian trading, consolidating near 122.50. USD/JPY recovered sharply after a corrective pullback from last week's high at 125.10 after the publication of a strong report on the US labor market for March, which largely justified analysts' expectations.
According to statistics, 431K new jobs were created outside the agricultural sector, which turned out to be slightly worse than preliminary estimates of 490K, while the Average Hourly Earnings grew even more than expected, adding 5.6%, and the Unemployment Rate fell from 3.8% to 3.6%, while investors expected only 3.7%. In general, positive indicators on the labor market allow the US Federal Reserve to continue to implement its "hawkish" plans. In May, the market expects an increase in interest rates by 50 basis points at once, as well as the launch of a quantitative tightening program, which will reduce the US regulator's balance sheet.
The Bank of Japan in these terms lags far behind the US Federal Reserve and many other global financial regulators. Extremely low inflation rates allow the Japanese regulator to maintain an ultra-soft monetary policy, stimulating the recovery of the national economy. During the March 18 meeting, the Bank of Japan left the short-term discount rate on current accounts of financial institutions at -0.1%, unchanged since 2016. In addition, officials announced a gradual reduction in Japanese government bonds to pre-COVID-19 levels. Thus, the "dovish" rhetoric remains, despite the fact that rising consumer prices and increased geopolitical risks may put strong pressure on the Japanese economy. However, the demand for the yen as a safe-haven asset will continue to decline as the spread between the US Fed's and the Bank of Japan's interest rates widens.
Support and resistance
Bollinger Bands on the daily chart show a steady growth. The price range is actively narrowing from below, reflecting the emergence of multidirectional trading dynamics in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic, having reached the level of "20" is reversing upwards, signaling in favor of the development of corrective growth in the ultra-short term.
Resistance levels: 123.02, 124.00, 124.50, 125.09.
Support levels: 122.00, 121.26, 120.50, 120.00.
The US dollar shows flat dynamics in Asian trading, consolidating near 122.50. USD/JPY recovered sharply after a corrective pullback from last week's high at 125.10 after the publication of a strong report on the US labor market for March, which largely justified analysts' expectations.
According to statistics, 431K new jobs were created outside the agricultural sector, which turned out to be slightly worse than preliminary estimates of 490K, while the Average Hourly Earnings grew even more than expected, adding 5.6%, and the Unemployment Rate fell from 3.8% to 3.6%, while investors expected only 3.7%. In general, positive indicators on the labor market allow the US Federal Reserve to continue to implement its "hawkish" plans. In May, the market expects an increase in interest rates by 50 basis points at once, as well as the launch of a quantitative tightening program, which will reduce the US regulator's balance sheet.
The Bank of Japan in these terms lags far behind the US Federal Reserve and many other global financial regulators. Extremely low inflation rates allow the Japanese regulator to maintain an ultra-soft monetary policy, stimulating the recovery of the national economy. During the March 18 meeting, the Bank of Japan left the short-term discount rate on current accounts of financial institutions at -0.1%, unchanged since 2016. In addition, officials announced a gradual reduction in Japanese government bonds to pre-COVID-19 levels. Thus, the "dovish" rhetoric remains, despite the fact that rising consumer prices and increased geopolitical risks may put strong pressure on the Japanese economy. However, the demand for the yen as a safe-haven asset will continue to decline as the spread between the US Fed's and the Bank of Japan's interest rates widens.
Support and resistance
Bollinger Bands on the daily chart show a steady growth. The price range is actively narrowing from below, reflecting the emergence of multidirectional trading dynamics in the short term. MACD is declining keeping a weak sell signal (located below the signal line). Stochastic, having reached the level of "20" is reversing upwards, signaling in favor of the development of corrective growth in the ultra-short term.
Resistance levels: 123.02, 124.00, 124.50, 125.09.
Support levels: 122.00, 121.26, 120.50, 120.00.