USDJPY Technical Analysis – The rangebound price action continues

Fundamental Overview

The USD remains under pressure as the recent economic data came in on the softer side. That weighed on Treasury yields and the market pricing which saw a more dovish repricing in expectations.

Overall, the market continues to expect two rate cuts in 2025, but the path of least resistance favours more rate cuts. Therefore, the greenback will need stronger data to trigger a more hawkish repricing and get a boost.

On the JPY side, the BoJ kept interest rates unchanged at 0.5% and reduced the bond tapering plan for fiscal year 2026 as expected. It was basically a non-event which is also reflected in the market given that the exchange rate is almost unchanged on the day.

USDJPY Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDJPY eventually bounced near the key 142.35 support as the pair continues to range between the 142.35 and 146.00 level. The buyers keep on stepping in around the support to target a rally into the 148.28 level, while the sellers will need a break below the 142.35 support to extend the drop into the 140.00 handle next.

USDJPY Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price yesterday broke above the 144.30 zone which has been acting as kind of a barometer for the near-term momentum. The buyers will now likely pile in around the zone to position for a rally into the 146.28 level next. The sellers, on the other hand, will want to see the price falling back below the zone to target the 142.35 support again.

USDJPY Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor upward trendline defining the bullish momentum on this timeframe. If we get a pullback into the trendline, we can expect the buyers to lean on the trendline with a defined risk below it to position for a rally into the 146.28 level. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the 142.35 support next. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we get the US Retail Sales data. Tomorrow, we have the US Jobless Claims and the FOMC Policy Decision. On Friday, we conclude the week with the Japanese CPI.