USD/JPY looks ready to extend a longer-term downtrend after days of strength!
Think USD/JPY could turn lower in the next trading sessions?
Here’s the resistance area we’re watching on USD/JPY’s 4-hour chart!
USD/JPY 4-hour Forex Chart by TradingView
The U.S. dollar has been sliding against the Japanese yen all year, weighed down by shaky U.S. economic data, trade war risks, rising Fed rate cut expectations.
The yen, on the other hand, has been getting attention amidst increasing geopolitical and trade tensions, hawkish BOJ expectations, and rising Japanese government bond yields.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/JPY reversed from the 158.50 area earlier this year and has been in a downtrend ever since. Today, the pair is testing key resistance after bouncing from its 146.60 lows.
A bearish candle has formed near the 149.00 psychological level, lining up with the 100 SMA, the 61.8% Fibonacci retracement of the latest downswing, and a trend line that’s been capping gains since February.
If sellers step in, a break below 148.00 could strengthen bearish momentum, potentially dragging USD/JPY back toward 146.60 or even new 2025 lows.
But the bulls might just be catching their breath. A sustained push above the trend line, 100 SMA, and 150.00 resistance could shift momentum higher, opening the door for a move toward 151.25 or even 154.00.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
