Over the past 24 to 48 hours, USD/JPY has demonstrated a clear consolidation pattern, trading primarily between 156.7 and 157.2, with the closing price yesterday at 157.176. Market volatility remained limited, reflecting investor caution as they await the upcoming US Non-Farm Payroll (NFP) report for directional clues.

Recent news highlights that, despite the Bank of Japan adopting a more hawkish stance supporting yen strength, the strong US dollar continues to underpin USD/JPY. Uncertainty over the Federal Reserve’s potential rate cuts in the near term has kept the pair confined at elevated levels. UOB’s research notes a positive divergence in USD/SGD, suggesting a possible rebound in the US dollar, indirectly influencing USD/JPY price action. Additionally, mixed signals from robust Japanese consumer spending and weak wage growth have left investors cautious regarding the BoJ’s future policy path.

For the average investor, this scenario resembles a pause before a major announcement. The USD/JPY consolidating at high levels means a significant directional move is unlikely in the short term. Patience is advised, with close attention to key US economic data like the NFP report to make informed trading decisions.

Daily Chart

Examining the daily chart, USDJPY remains in a consolidation phase within a tight price band. The 50-day moving average near 155.40 and the 200-day moving average near 148.90 maintain an upward bias, confirming a longer-term bullish trend. Bollinger Bands are narrowing, signaling reduced volatility and a lack of strong breakout momentum. MACD remains flat, indicating subdued momentum. This price action reflects the ongoing market uncertainty driven by contrasting monetary policies and economic data from Japan and the US.

1H Chart

The hourly chart over the past 3-5 days shows USDJPY oscillating between 156.30 and 157.05, a classic range-bound movement. Short-term moving averages intertwine without clear directional bias. The MACD histogram shows slight waning momentum, with bulls struggling to push higher. Price is frequently testing the middle Bollinger Band, indicating equilibrium between buyers and sellers. Traders await decisive data, with the technical pattern suggesting continued sideways action in the short term.

Technical Trend:  USDJPY currently displays a cautious sideways consolidation trend, reflecting market uncertainty and awaiting a catalyst. The trend can be described as ‘Narrow Range Sideways’, with price action area-bound and lacking definitive direction until new fundamental triggers emerge.

Technically, USDJPY is trading inside a narrow range between 156.30 and 157.05, with MACD showing little momentum and Bollinger Bands contracting, indicating low volatility. Both daily and hourly charts confirm a range-bound consolidation state, signaling indecision among market participants. The most recent candlestick patterns include multiple dojis and small-bodied candles, suggesting balance between buyers and sellers. Key levels to watch are resistance at 157.05 and support at 156.30. A break above or below this zone, likely triggered by the upcoming US Non-Farm Payroll data, may offer a high-probability trading opportunity.

Today’s economic calendar includes Japan’s November Household Spending data released at 00:30 GMT+1, showing a strong 2.9% year-on-year increase, higher than expected, potentially offering some support to the yen. Other notable releases such as China’s CPI and PPI and Germany’s trade and production data have less direct impact on USDJPY. The highlight is the US Non-Farm Payroll release at 14:30 GMT+1, alongside wage and unemployment figures, which will be key drivers for USDJPY price direction. Strong US data would likely boost the dollar and push USDJPY higher, while weaker figures could strengthen the yen and send the pair lower.

Resistance & Support

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