On the H1 timeframe chart, USDJPY initially moved within a relatively stable sideways channel at the beginning of the month. A sharp price drop then occurred, falling from 160.02 to 157.88 and forming significant bearish candles. From this low point, the trend reversed into a bullish movement, forming an ascending channel. The current price is trading around 159.18, attempting to approach the resistance level at 159.30, which previously acted as support in the earlier sideways channel and has now turned into resistance.
From a technical indicator perspective, Bollinger Bands show that price has rebounded from the lower band and is now moving toward the upper band, indicating strengthening bullish momentum within the ascending channel. Meanwhile, the Stochastic oscillator is approaching the overbought zone, suggesting that upward momentum remains strong but may face short-term exhaustion or consolidation near resistance. Additionally, the Bulls Power indicator has turned positive and is gradually increasing, reflecting growing buying pressure in the market.
USDJPY initially declined as easing geopolitical tensions weakened the US dollar and increased demand for the Japanese yen amid improved risk sentiment. However, the move reversed as expectations of a higher-for-longer stance from the Federal Reserve, along with upcoming US inflation data, supported a recovery in the USD. In Japan, the Bank of Japan is gradually normalizing its monetary policy as inflation rises, although interest rates remain low and overall conditions are still accommodative. This policy divergence continues to keep the yen relatively weak, supporting a bullish reversal in USDJPY.
Technical Market Overview
1. Current Position: USDJPY is trading around 159.18, moving within a well-defined ascending channel following a strong bullish reversal from the recent low at 157.88.
2. Resistance Zone: The nearest resistance is located at 159.30, which represents a key level where previous support has turned into resistance. A breakout above this level may open the path toward the 160.00–160.02 area.
3. Support Zone: Immediate support is seen around 158.90, aligning with the diagonal support of the ascending channel, while stronger support is located at 157.88, marking the recent swing low.
4. Indicator Observation: Bollinger Bands indicate price is moving toward the upper band, suggesting increasing bullish momentum. The Stochastic oscillator is nearing overbought territory, signaling potential short-term consolidation. Meanwhile, Bulls Power remains positive, reflecting sustained buying pressure.
5. Technical Summary: Overall, USDJPY maintains a bullish structure within an ascending channel. While momentum remains supportive for further upside, the proximity to resistance and overbought signals suggests the potential for short-term consolidation before any confirmed breakout continuation.
Market Performance:
Forex Last Price % Change
EUR/USD 1.1686 −0.10%
GBP/USD 1.3422 −0.11%
Today’s Key Economic Calendar:
CN: Inflation Rate MoM & YoY
CN: PPI YoY
US: Core Inflation Rate MoM & YoY
US: CPI
CA: Full Time Employment Change
CA: Part Time Employment Change
CA: Participation Rate
CA: Unemployment Rate
US: Factory Orders MoM
US: Michigan Consumer Sentiment Preliminary
Risk Disclaimer: This report is for informational purposes only and does not constitute financial advice. Investments involve risks, and past performance does not guarantee future results. Consult your financial advisor for personalized investment strategies.
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