Over the past 24 to 48 hours, USD/JPY experienced notable volatility during the Asian trading session, falling below 154.80. The closing price yesterday stood at 154.768, down from 155.2 the day before, reflecting increased strength in the Japanese Yen against the US Dollar.

This decline was primarily driven by growing market speculation of an imminent rate hike by the Bank of Japan (BoJ), prompting investors to buy the Yen in anticipation of its appreciation. Additionally, weak recent US employment data put pressure on the dollar, contributing to the downward move in the USD/JPY pair. In essence, the US dollar’s weakness contrasted with the Yen’s strength, which was the main factor behind recent price action.

For the average investor, this signals heightened currency risk, especially for those holding dollar-denominated assets. Keeping a close eye on BoJ policy developments and US economic data is crucial to avoid adverse impacts from exchange rate fluctuations. Amid current global economic uncertainties, the USD/JPY movements serve as a critical barometer of market sentiment.

Daily Chart

The daily chart shows USDJPY in a clear downtrend from a recent high near 158.857. The price has decisively broken below the 50-day moving average (around 154.05) and approaches the 200-day moving average (around 148.34). Bollinger Bands are widening, indicating increasing volatility. The MACD indicator has formed a bearish crossover, confirming the presence of selling pressure. Overall, the daily timeframe suggests sustained bearish momentum, making it prudent for long-term investors to stay cautious and monitor key support levels for potential acceleration of downside moves.

1H Chart

The hourly chart depicts USDJPY consolidating in a narrow range between 155 and 154 over the past 3-5 days, showing price compression. After multiple failed attempts near resistance at 154.80, the price has retreated, and short-term moving averages trend downwards. Bollinger Bands are contracting, signaling possible upcoming volatility. The MACD histogram recently turned negative with a downward signal line crossover, reflecting weakening momentum. Notably, recent candlestick patterns include bearish engulfing formations, indicating dominance of sellers. A breach below the 154 support may trigger a larger downside move.

Technical Trend:  USDJPY is currently in a cautious bearish downtrend with volatile sideways price action, representing a ‘Cautiously Bearish’ market tone.

Technical analysis shows USDJPY in a confirmed bearish trend on both daily and hourly charts. The daily MACD bearish crossover and moving average alignment confirm ongoing selling pressure. The hourly chart’s price compression, narrowing Bollinger Bands, and bearish engulfing candles suggest waning bullish momentum and potential heightened volatility soon. A clear break below the 154 support level may serve as a trigger for accelerated downside movement. Market sentiment is heavily influenced by BoJ rate hike expectations, favoring Yen strength. Traders should watch the 154/155 levels closely for a decisive breakout to identify the next directional trade.

Today’s economic calendar highlights key Japanese data releases at 00:50 GMT+1 (approximately 08:50 HKT) including the November Trade Balance (forecast 70 billion JPY), Exports (4.8% YoY), and Imports (2.5% YoY). Better-than-expected figures could further strengthen the Japanese Yen, weighing on USDJPY. UK inflation data at 08:00 GMT+1 is less directly impactful on USDJPY but can influence overall market sentiment. No major US economic data impacting USDJPY is scheduled today. As the BoJ policy meeting looms, focus remains on Japan’s economic metrics to anticipate Yen strength.

Resistance & Support

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