The USDJPY pair is currently consolidating near a significant resistance level. Last week, the USD strengthened broadly due to risk-off flows and renewed concerns over tariffs, despite some disappointing US economic data.
The Japanese Yen maintained support amid risk-averse sentiment and declining Treasury yields. However, last Friday saw the Yen weaken as the Tokyo CPI did not meet expectations, reducing speculation for further rate hikes this year.
Technical Analysis On Daily Chart
On the daily chart, the USDJPY rebounded from 148.60, reaching 150.93 resistance, where sellers may emerge. Buyers are poised to push higher to extend the pullback trajectory.
In the 4-hour analysis, the pullback shows range-bound activity, with sellers focusing on a decline back to 148.60, while buyers target a rally past the resistance.
The 1-hour chart reveals a support zone at 150.18, which may attract buyers aiming for a break above resistance. Alternatively, sellers could push the price lower towards 148.60.
Upcoming economic data includes the US ISM Manufacturing PMI and the deadline for Trump’s tariffs. Key reports like the US ADP and ISM Services PMI, along with Jobless Claims figures, will be released throughout the week, culminating with the US NFP report on Friday.
The price movement suggests a battle between buyers and sellers, with neither side gaining full control for now. While the broader trend favours further upside for the US dollar, short-term fluctuations could create opportunities in both directions.
Looking at last week’s developments, the dollar saw gains mainly due to a shift in sentiment. Traders moved away from riskier assets, seeking safety in the greenback, even as some economic figures out of the US came in weaker than expected. Tariff concerns only added to the demand. On the other hand, the yen held firm for most of the week as falling Treasury yields and overall risk aversion lent support. However, expectations shifted on Friday when inflation data from Tokyo suggested less pressure for the Bank of Japan to raise rates soon. That sent the yen lower.
Key Resistance And Support Levels
Technically, the resistance around 150.93 stands as a clear challenge for buyers. At that level, sellers have been stepping in to limit further gains. If they continue to defend this zone, attempts to push higher could struggle. Yet, if buyers manage to clear the hurdle, further gains may follow. Given the recent price action, some could be looking at 148.60 as an area where demand might increase again, keeping the range intact for now.
Looking at the shorter timeframes, the movements remain within a defined zone. On the 4-hour view, prices have been bouncing between key levels, suggesting no clear breakout just yet. A drop from resistance may pull the pair lower, but if buyers regain momentum, a renewed challenge to the highs could take place. On the 1-hour chart, buyers have shown interest around 150.18. Holding that level keeps the focus on resistance, but any downside break through it could expose lower targets.
This week is packed with data releases likely to bring volatility. The ISM Manufacturing PMI is up first, followed by Trump’s tariff deadline. Later in the week, ADP employment figures and the ISM Services PMI will provide more insight into economic conditions. Weekly jobless claims are also due, leading up to Friday’s highlight—the Non-Farm Payrolls report. Each of these releases carries the potential to shift expectations, keeping market participants on high alert.
