The USD/JPY currency pair

• Prev Open: 142.70
• Prev Close: 143.74
• % chg. over the last day: +0.72 %

From a fundamental point of view, the situation remains the same. With inflation in Japan still subdued, traders are betting that the Bank of Japan will not lift a finger to stop the yen’s fall. Most importantly, wage growth and inflation expectations remain subdued, so it does not look like inflation will take root. Consequently, the Bank of Japan is convinced that this is a global supply shock that will soon dissipate. The Japanese yen has already lost 25% of its value against the dollar index this year. With regard to the implementation of currency intervention, such a move now seems unrealistic. First, Japan would have to intervene alone, because neither Europe nor the US would agree to loosen its monetary policy now. Second, individual intervention implies a lower probability of success, requiring tons of foreign exchange reserves, and may even have unpleasant consequences.

• Support levels: 142.83, 141.77, 141.00, 139.61, 138.78, 137.65, 136.80, 135.20
• Resistance levels: 145.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the average lines, and the buyers’ pressure is still there. The MACD indicator remains positive, there is no sign of reversal. Under such market conditions buy trades can be sought from the support level of 142.83 or 141.77, but with additional confirmation. Sell deals can be considered on the intraday time frames from the psychological level of 145.00, but only with additional confirmation, as fundamentally, USD/JPY quotes are inclined to grow.

Alternative scenario: If the price fixes below 141.00, the downtrend will likely resume.

The USD/CAD currency pair

• Prev Open: 1.3151
• Prev Close: 1.3118
• % chg. over the last day: -0.25 %

The Bank of Canada held its fourth consecutive interest rate hike in an attempt to lower inflation from a four-year high. Policymakers led by Governor Tiff Macklem raised the benchmark overnight rate by 75 basis points to 3.25% on Wednesday, giving Canada’s Central Bank the highest interest rate among major advanced economies. At the same time, officials said they expect rate hikes to continue in the coming months, but the next hikes are likely to have a small adjustment.

• Support levels: 1.3077, 1.3020, 1.2989, 1.2958, 1.2936, 1.2900
• Resistance levels: 1.3220

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is now trading below the moving averages, the MACD indicator has become negative, and there is some seller pressure, but the latent divergence indicates that the price is difficult to move lower. Under such market conditions, buy trades should be considered on the lower time frames from the support level of 1.3077, but only with confirmation. The best way to sell is to consider the resistance level of 1.3220, but only after a false breakout, as the level has already been tested and a lot of liquidity has been formed above the level.

Alternative scenario: if the price breaks down and consolidates below the 1.3077 support level, the downtrend will likely resume.

• – US Crude Oil Reserves (w/w) at 18:00(GMT+3).