USDJPY Technical Analysis – We are trading at a key resistance | Forexlive

Fundamental
Overview

The USD appreciated a
little the day after the FOMC decision although it seemed more like a technical
pullback as the central bank didn’t offer anything new. In fact, the Fed just
delivered on expectations keeping rates steady, reducing the QT pace, revising
growth lower and inflation higher, and keeping the dot plot mostly unchanged.

Fed Chair Powell just acknowledged
the current uncertainty around Trump’s policies and the inflation outlook but
confirmed that the economy remains healthy, and the Fed is in a good position
to wait for more clarity. The market is pricing around 69 bps of easing by
year-end.

On the JPY side, the BoJ
kept everything unchanged as expected with the statement acknowledging heightened
uncertainty surrounding Japan’s economy, adding a new reference to the
“evolving situation regarding trade.”

This suggests that policymakers
are closely monitoring Trump’s tariff policies, with global trade developments
remaining a key risk factor for Japan’s outlook. The market continues to expect
33 bps of tightening by year-end with particular focus on inflation data.

USDJPY
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDJPY is testing the major trendline. This is where we can expect the
sellers to step in with a defined risk above the trendline to position for a
drop into the 140.00 handle. The buyers, on the other hand, will look for a
break higher to start targeting the 160.00 handle next.

USDJPY Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the bearish setup around the trendline that may end up in a double
top at this strong resistance
zone around the 150.00 handle. The sellers will likely pile in around these
levels with a defined risk above the trendline, while the buyers will need to see
a break higher to gain more conviction for further upside.

USDJPY Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, there’s
not much else we can add here as the sellers will look for a rejection around these
levels, while the buyers will look for a break higher. A break below the upward
trendline and the neckline of the potential double top at 148.18 will likely
increase the bearish momentum. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the US Flash PMIs. Tomorrow,
we have the US Consumer Confidence report. On Thursday, we get the latest US
Jobless Claims figures. On Friday, we conclude the week with the Tokyo CPI and
the US PCE report.

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