USD/JPY: asset decline stopped at 139.00

Current trend

The decline of the USD/JPY pair stopped at 139.00 against the backdrop of Japan's publication of negative macroeconomic statistics.

The Q3 gross domestic product (GDP) data showed a negative trend: the indicator reached 1.2% YoY, worse than analysts' expectations, which assumed growth to 1.1% and decreased by 0.3% QoQ, below the forecast of an increase to 0.3%. Another negative factor for the national currency was the decline in industrial production in September to –1.7% against expectations of –1.6% and the previous value of 3.4%. Service PMI also accelerated the negative dynamics to –0.4%, although analysts expected growth by 0.6%. Thus, the negative indicators of the Japanese economy keep the trading instrument from further decline.

Today, investors' attention will be focused on the publication of statistics on industrial production in the US: if the figures are better than expected, then the dollar will probably continue to strengthen.

Support and resistance

The long-term trend remains upward. At the moment, market participants are testing the key trend support at 139.00, if it holds, a new upward impulse will begin with the target at 145.50, and in case of a breakdown, the trend will change downwards with the targets at 135.90 and 132.20.

The medium-term trend is downwards. Last week, the quotes broke the target zone 2 (142.41–141.97), and the next target is zone 3 (137.55–137.10), while the trend line shifted to 143.02–142.53. In case of price correction in this area, short positions with the target at the current week's low, around ​​137.70, will become relevant.

Resistance levels: 140.50, 145.40.

Support levels: 135.90, 132.20.

Short positions may be opened below 140.50 with the target at 135.90 and stop loss around ​​141.80. Implementation period: 7–10 days.

Long positions may be opened above 141.80 with the target at 145.50 and stop loss around 140.30.