It was don’t fight the Fed day and the USD/JPY currency pair soared by 1.24%. This allowed it to retake the 143.00 level as risk sentiment in the financial markets surged. The 2-way trade today navigated just higher/lower than the daily highs/lows of 141.45 and 143.49 respectively. Even with this latest rally, analysts are cautioning that the overall bias for USD/JPY is still negative. Macroeconomic conditions are continuing to present stiff headwinds in the market.
Today’s bounce in the USD/JPY pair represents a significant reversal from lowwater marks set in midweek where the boonie dog was put down by fierce market selling. The price rose again to the 143.00 level. Traders saw some immediate support at 143.11, which might serve as protection from any potential move lower. Additional support levels come in at 142.62 and 141.57. These conditions form a cushion for the currency pair during market corrections.
Resistance levels are important for USD/JPY, with major zones at 144.72, 145.52 and 145.54. Analysts caution that the pair may struggle to breach these resistance points unless macroeconomic conditions shift decisively in favor of the U.S. dollar. The current sentiment suggests that any upward momentum could be limited unless supported by strong economic data or shifts in monetary policy.
The technical indicators for USD/JPY are showing a bearish trend. The 20-day simple moving average (SMA) is located at 145.52 and is heading south, showing the strong bearish tendency. Relatedly, the 100-day SMA is 151.45 and the 200-day SMA is 150.24, oriented to the downside. These two moving averages indicate that the bearish sentiment will likely continue until the pair is able to hold above these levels.