Over the past 24 to 48 hours, USDJPY has continued its upward trajectory, extending its winning streak for the third consecutive session, trading around 158.60 during Asian hours, showing slight fluctuation from yesterday’s closing price of 158.699. The rise in the USD/JPY rate was primarily driven by the ongoing geopolitical conflict in the Middle East, which strengthened the US dollar while the Japanese yen weakened due to diminished safe-haven demand. Rising concerns over the Middle East situation boosted the dollar’s safe-haven appeal, pushing the USDJPY higher.

Moreover, Japan’s formal request for a tariff exemption from the US added short-term support for the dollar, as it alleviated some fears of escalating trade tensions between the two economies. Meanwhile, weaker-than-expected US February payroll and January retail sales data theoretically put pressure on the dollar. However, the geopolitical tensions in the Middle East had a stronger effect, creating a market dynamic where economic weakness should drag the dollar down, yet risk premiums are pushing it higher.

For the average investor, this means that currency fluctuations right now are not purely based on economic fundamentals but are heavily influenced by geopolitical security developments. Traders should remain vigilant, closely monitor market news, and seize opportunities presented by the dollar’s strength, while also being mindful of the heightened volatility risk posed by ongoing conflicts.

Daily Chart

The daily chart reveals a steady upward trend with prices consistently above both the 50-day and 200-day moving averages, confirming a strong bullish formation. The Bollinger Bands are expanding upwards, indicating increasing volatility. MACD remains positive with the faster moving line above the slower one, signaling sustained upward momentum. The price rally started accelerating early in the month, forming a recognizable ascending wedge or flag pattern, suggesting continuation of the bullish momentum.

1H Chart

On the hourly chart, price action shows consistent gains over the last 3-5 days, repeatedly testing and breaking through minor consolidation zones. Price remains above key moving averages. The MACD lines have recently crossed bullishly (golden cross), reinforcing short-term momentum strength. The Bollinger Bands show widening, aligning with increased volatility. A recent bullish engulfing candlestick pattern suggests the next 24 hours could continue the upward trend with active buying pressure.

Technical Trend:  Decisively Bullish

Technical analysis highlights USDJPY’s strong bullish breakout phase. The daily chart’s ascending wedge combined with MACD momentum above zero supports a continued uptrend. The hourly chart’s recent bullish engulfing candlestick and MACD golden cross reaffirm short-term buying interest. The fundamental backdrop of heightened Middle East tensions and expanding US-Japan interest rate gaps offer strong support to the bullish technical outlook. Key levels to watch include resistance at 159.45 and 158.70, with support near 157.50 as an area to manage risk and plan entries.

Today’s economic calendar includes Japan’s January current account data, which came in line with expectations, indicating stable external trade—a neutral factor for USDJPY. China’s February Consumer Price Index showed inflationary pressure but will unlikely have a direct impact on USDJPY. Overall, there are no major economic releases today expected to cause significant volatility for USDJPY. Market focus remains on geopolitical developments and interest rate differentials.

Resistance & Support

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