USDJPY Technical Analysis – Ranging Around Key Levels
The USDJPY pair has remained rangebound around the 155.00 level throughout the week. What’s the outlook moving forward?
Fundamental Overview: The US Dollar has shown limited movement this week, as the market awaits new triggers to push prices in either direction. Market expectations remain largely unchanged, with three rate cuts anticipated by the end of 2025 for the Fed.
Yesterday, the greenback saw some late gains, though there was no clear catalyst behind the move. These gains are now being unwound this morning, and it remains to be seen whether this trend will continue. On the Japanese side, the latest CPI report came in mostly as expected, with inflation slightly above the BoJ’s 2% target. The market is pricing in a 58% chance of a rate hike in December and a total of 48 bps of tightening by the end of 2025.
USDJPY Technical Analysis – Daily Timeframe: On the daily chart, USDJPY has been confined to a range around the 155.00 level this week. From a risk management perspective, buyers may find a better risk-to-reward setup near the 152.00 support level, positioning for a potential rally toward the 160.00 level. Sellers, however, will be watching for a break below the support to target further declines.
USDJPY Technical Analysis – 4-Hour Timeframe: On the 4-hour chart, an upward trendline has been repeatedly tested, with price getting rejected several times in recent weeks. Buyers will likely continue to use this trendline as a base for potential rallies, while sellers will look for a break below this trendline to signal a move lower and test key support levels.
USDJPY Technical Analysis – 1-Hour Timeframe: On the 1-hour chart, the price recently broke above a minor downward trendline, which had been defining the pullback towards the main trendline. This could signal potential for higher prices, but given the rangebound nature of price action, it may also turn out to be a false breakout. The red lines on the chart indicate today’s average daily price range.
Upcoming Catalysts: We wrap up the week with the release of US PMI data later today.