As we noted in our previous review dated 04/11/2022, the divergence in the monetary policy rates of the Fed and the Bank of Japan is likely to increase, creating prerequisites for further growth of USD/JPY. In this case, the pair will head towards multi-year highs near 135.00, reached in January 2002.

Our forecast was fully justified, and the set targets (Buy Stop 125.50. Stop Loss 124.40. Take-Profit 125.65, 126.00, 127.00, 128.00, 134.00, 135.00) were reached by about 80%. Ahead are the marks 134.00, 135.00. With continued growth rates, the USD/JPY pair may reach them this month, and then continue to grow.

The continued positive upward trend in the yield of 10-year US bonds makes the dollar an attractive asset for investment, given the prospects for further tightening of the Fed's monetary policy. The dollar is also actively used as a defensive asset, winning back the advantage from such traditional defensive assets as gold, franc, and yen.

In the current situation, short positions in USD/JPY can only be considered as part of a short-term correction.

At the time of writing this article, the USD/JPY pair is trading near 132.70, having slightly decreased from the local high of 133.00 reached during today's Asian trading session. The breakdown of this local resistance level will be a signal to increase long positions. You can also place pending orders to buy near the support levels of 131.60 (200 EMA on the 15-minute chart), 131.30, 131.00 (local support levels). Only a breakdown of support levels 127.10 (50 EMA on the daily chart), 127.00 (local support level) should alert buyers. In this case, we can return to the consideration of the possibility of short positions on USD/JPY. In the meantime, long positions remain preferable.

Support levels: 132.00, 131.30, 131.00, 129.75, 128.20, 127.10, 127.00

Resistance levels: 133.00, 134.00, 135.00, 136.00

Trading Tips

Buy Stop 133.10. Stop Loss 131.80. Take-Profit 134.00, 135.00, 136.00

Buy Limit 131.00, 130.00, 129.00, 128.00, 127.00. Stop Loss 126.20. Take-Profit 132.00, 133.00, 134.00, 135.00, 136.00