Over the past 24 to 48 hours, USD/JPY has maintained a strong upward trajectory, edging up from yesterday’s closing price near 157.60 to around 157.85 currently, indicating continued dollar strength against the yen. The US Dollar Index (DXY) recorded a sharp gain of 1.29% earlier this week, hitting a 3.25-month high and underscoring broad-based dollar resilience.

This dollar rally is primarily driven by reduced odds of a Federal Reserve rate cut in the near term. Investors have reassessed the robustness of the US labor market, especially after weekly jobless claims came in lower than expected, supporting the greenback’s appeal. Additionally, escalating geopolitical tensions in the Middle East have heightened risk aversion, weakening the Japanese yen’s traditional safe-haven status and pushing USD/JPY higher.

For average investors, this means dollar-denominated assets have become more attractive in the short term, while the yen struggles to rally amid domestic and international risks alongside the Bank of Japan’s continued dovish stance. Market participants should monitor upcoming Fed communications and global geopolitical developments closely, as these will be key drivers influencing USD/JPY volatility moving forward.

Daily Chart

The daily chart reveals a robust uptrend in USDJPY from recent lows, with price maintaining above the 50- and 200-day moving averages, indicating sustained long-term bullishness. Bollinger Bands are expanding, signaling increased volatility, while the price sits near the upper band. The MACD histogram remains positive, reflecting continued upward momentum. Overall, the daily technicals suggest that breaking above the key resistance near 159 is plausible and could open the way for a further rally.

1H Chart

In the short term, the hourly chart over the last 3-5 days shows a clear ascending channel with prices consistently trading above short-term moving averages, highlighting strong bullish momentum. Bollinger Bands are tightening, implying consolidation before a potential breakout. MACD is nearing a bearish crossover and RSI is close to overbought territory, warning of a possible short-term pullback. However, elevated volume alongside this momentum hints at ongoing market enthusiasm, making the near-term outlook cautiously optimistic.

Technical Trend:  Trend Status: Decisively Bullish

USDJPY is currently forming a bullish ascending triangle pattern that has been developing since late February, narrowing price range while building momentum. Yesterday’s bullish engulfing candlestick adds strength to the near-term upside potential. Combined with solid volume support and a positive MACD momentum, this suggests a strong possibility of an imminent breakout above the psychological 159.00 level. Traders should watch for a decisive close above this level to confirm trend continuation.

Today’s economic calendar does not include any major economic releases directly impacting USDJPY, such as Japanese or US key data. However, investors should watch for tomorrow’s Japanese Consumer Confidence index and the US ADP employment report released later during US market hours, which could influence USDJPY’s direction. Chinese manufacturing and services PMI figures also showed slight improvements, potentially providing regional confidence support.

Resistance & Support

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