General analysis USDJPY for 23.03.2022

Current dynamics

On the background of geopolitical instability quotation of the currency pair USD/JPY continue their movement to the maximum of 2014.
Japanese Prime Minister Hirokazu Matsuno intends to participate in the summit of G7 leaders in Brussels where the conflict in Ukraine will be discussed. Summit will take place from 23 to 25 March. However, previously imposed Japanese sanctions against Russia have already led to Russia's refusal to negotiate with Japan on the issue of the Kuril Islands.
Despite this, Japan still participates in Russia's oil and gas project Sakhalin-2. According to analysts, if the Japanese government leaves the Sakhalin-2 project they will have to import an additional $15 billion of liquefied natural gas. Along with the growth of energy prices in Japan, the prices of construction materials are increasing. For example, steel construction prices rose by 6-9%, concrete and wood prices increased by an average of of 18%. It is worth noting that Russia and Ukraine accounted for about 11% of world steel exports.
At its last meeting, Bank of Japan left interest rate unchanged at -0.10%, but noted that inflation will accelerate due to rising energy prices.
Index of Japan's leading economic indicators published in the morning fell by 1.2% while experts predicted a 1% decline.
It is worth noting that the number of mortgage applications in the U.S. has been decreasing over the past year. This week, the number of applications fell by 8.1%.The number of new home sales in the USA in February totaled 772K while experts forecasted 810K.

Tomorrow at 02:30 (GMT+2), Japan's Manufacturing PMI will be released at 2:30 (GMT+2) forecasting an increase to 53.5. Also at 14:30 (GMT+2) will be released data on Core Durable Goods Orders and initial jobless claims in the U.S. Later in the day, the U.S. manufacturing and service sector indexes for March will be released at 15:45 (GMT+2).

Support and Resistance levels.

USD/JPY was rising during the week. At the opening of trading the currency pair traded above the key Fibonacci level of 261.8, but failed to fix.
The current trend is upward. RSI oscillator is in the overbought zone. The oscillator shows divergence.

• Support levels: 120.40, 120.00, 119.40, 119.15,118.88, 118.37
• Resistance levels: 120.82, 121.07, 121.60,122.72

Trading scenarios

• Short positions can be opened from the level of 120.82 with the target of 120.40 and stop-loss 121.70 Implementing period: 1-3 days
• Long positions can be opened from the level of 120.40 with the target of 121.60 and stop-loss 120.00. Implementation period: 1-3 days