Two factors will have a strong influence on the course of trading in this currency pair today. The first factor is the dynamics of the stock markets, where investors are now focused on the story of the Chinese developer Evergrande, which may announce a technical default on its bonds tomorrow. A technical default gives the company 30 days to correct the situation, and if the company does not pay the money on its debts by October 23, then a default will be declared and creditors can sue for bankruptcy.

Evergrande owes about $100 billion to various banks and funds, as well as a similar amount to its counterparties in the residential real estate market in the Middle Kingdom. The default will have a negative influence on the real estate industry in China. Against this background, investors are in no hurry to buy shares on world exchanges, which is neutral for the USDJPY pair. The second factor is the US Federal Reserve’s decision on monetary policy. Today I do not expect any surprises from the Fed about the change in the discount rate and the QE program, which will have a negative influence on the value of the dollar.

Trading recommendation: Sell 109.70/109.95 and take profit 109.11.