The USD/JPY Exhausts Its Positive Momentum
Original analysis by Economies.com
As of August 13, 2025, the USD/JPY currency pair appears to have reached the limits of its recent bullish movement, according to technical analysis by Economies.com. Following a series of positive trading sessions, recent price patterns indicate that the pair may enter a corrective phase after losing upward momentum near key resistance levels.
Current Analysis Overview
– The USD/JPY has exhibited notable gains over the last several weeks, driven by a stronger U.S. dollar and rising Treasury yields.
– However, signs of bullish exhaustion are becoming evident as the price approaches critical resistance near the 147.50 level.
– The daily chart shows that upward movement has begun to slow down, with RSI indicators entering overbought territory while momentum indicators start to flatten.
– These technical indications support the notion that the bullish wave may have reached its near-term peak, aligning with the broader market expectation of a correction.
Technical Observations
Economies.com’s latest analysis highlights various technical cues that support the likelihood of a reversal or at minimum a consolidation:
1. Resistance Level Confirmation
– The pair has encountered resistance at the 147.50 area, a level aligned with a previous high.
– Multiple tests of this level without a decisive breakout suggest strong selling pressure above this region.
2. Bearish Divergence Noted
– On the RSI (Relative Strength Index), a bearish divergence has emerged.
– While the price made higher highs, the RSI failed to make new highs, indicating weakening bullish momentum.
3. Candlestick Behavior
– Recent daily candlesticks show long upper wicks, implying rejection of higher prices.
– These candlestick formations are often early warning signals of a potential reversal.
4. Trend Line and Moving Averages
– The USD/JPY remains above the 50-day and 200-day moving averages, which indicates that the longer-term trend is still bullish.
– However, shorter-term price action suggests that a retracement toward the 50-day moving average is plausible in the coming sessions.
5. Volume Analysis
– Decreasing volume on the most recent upward moves suggests a lack of market conviction to push the pair through resistance.
– This decline in volume supports the argument for a temporary pause or downward correction.
Fundamental Context
In addition to the technical frameworks, several fundamental factors are influencing the USD/JPY outlook:
1. U.S. Economic Data
– Recently, U.S. data on inflation and labor markets have come in stronger than expected.
– These releases have supported the case for continued Federal Reserve policy tightening, fueling strength in the U.S. dollar.
2. Japanese Central Bank Policy
– The Bank of Japan continues its accommodative monetary stance with ultra-low interest rates.
– This policy divergence between the Fed and BoJ has traditionally favored the dollar, contributing to the pair’s bullish bias.
3. Geopolitical Factors
– Global uncertainty continues to support safe-haven demand for both the dollar and the yen.
– However, during risk-on market phases, the dollar tends to outperform due to its higher yield profile.
4. Treasury Yield Influence
– U.S. Treasury yields remain elevated, making the dollar more attractive in interest rate differentials.
– The USD/JPY pair is highly sensitive to changes in U.S. yields, and any pullback in yields could weigh on the dollar against the yen.
Forecast and Potential Scenarios
Based on the latest analysis, Economies.com puts forth the following potential directional scenarios depending on how the price action unfolds near current levels:
Scenario 1: Downward Correction
– If the USD/JPY fails to sustain levels above the 147.50 resistance zone, a pullback is highly probable.
– Target levels for the correction may include:
– Support at 146.10, which was a previous short-term consolidation level.
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Explore this further here: USD/JPY trading.