The focus of market participants today will be data on the dynamics of US GDP. The forecast of economists suggests a slowdown in the growth of the US economy in the 1st quarter of 2023 - from 2.6% to 2.0%. This indicator (GDP) is the main indicator of the state of the American economy, and along with data on the labor market and inflation, GDP data are key for the country's central bank in determining the parameters of its monetary policy.
A slowdown in GDP may confirm growing fears of a possible recession in the US, and is likely to also negatively affect the dynamics of the dollar, especially if real GDP data turns out to be even worse.
On Monday and Wednesday, another major indicator will be published: PMI indices (by ISM) of business activity in the manufacturing and service sectors of the American economy. Along with today's GDP data, they will be the last of the most important before the adoption of the Fed decision on Wednesday on the interest rate. Economists are forecasting another 25 basis points increase in US borrowing costs to 5.25% before Fed officials take a pause in increases to move towards monetary easing by the end of the year.
At the end of this week, the last one in April, the Bank of Japan will hold its meeting on monetary policy issues. The Central Bank wants to avoid a sudden normalization of monetary policy, as this will have a big impact on the markets, Kazuo Ueda, the new governor of the Bank of Japan, said recently this month. At the same time, Ueda confirmed that "the Bank of Japan will maintain the current monetary easing." Therefore, most likely, tomorrow there will be no surprises and unexpected decisions on the part of the leadership of the Japanese Central Bank: the interest rate, with a high degree of probability, will be maintained at the same level of -0.1%, as well as the volume of purchases of Japanese government bonds and the parameters for controlling the curve their profitability.
From a technical point of view, you can see how in recent days and on the eve of important publications, the USD/JPY pair is consolidating in the area of the balance line, the role of which is currently played by the 200-period moving average on the daily chart of the pair.
At the same time, the dollar itself and its DXY index maintain a downward trend, falling towards the psychologically significant mark of 100.00.
The dynamics of the USD/JPY pair is also affected, among other things, by the status of protective assets of both the yen and the dollar (under certain circumstances), and very often the USD/JPY pair moves according to its own algorithm, different from the dynamics of other major dollar pairs. Although, technical analysis can also be fully used here.
Support levels: 133.85, 133.40, 133.00, 132.70, 130.57, 129.55, 127.22, 124.00, 121.00.
Resistance levels: 134.25, 135.00, 135.10, 137.00, 137.80, 138.90.