Title: USD/JPY Loses Momentum After Exhausting Upward Potential – Technical Analysis (August 26, 2025)
Original author: Economies.com
The USD/JPY currency pair has recently demonstrated signs of exhaustion after a period of upward momentum. As noted in a recent analysis by Economies.com, the pair has failed to sustain the bullish trajectory it had been riding, signaling a potential turning point in price action. This technical analysis delves deeper into the factors contributing to the pair’s current behavior, examining price patterns, resistance and support levels, technical indicators, and market sentiment. With traders closely monitoring the Japanese Yen and US Dollar, a clear understanding of the current market dynamics is essential for forecasting future price movements.
Overview of Recent USD/JPY Performance
After experiencing a solid bullish trend in previous sessions, the USD/JPY pair appears to have reached a critical juncture where its upward push is losing momentum. Several technical indicators show signs of weakness, suggesting that the bullish wave could be coming to an end.
Key observations include:
– The pair failed to maintain levels above the critical resistance zone of 147.50, indicating the strength of sellers.
– Despite briefly breaching resistance, USD/JPY retreated back below, raising concerns of a false breakout.
– Price action is now consolidating near a vital technical level, showing indecisiveness among traders.
– The pair is now influenced by both technical resistances and underlying macroeconomic variables.
Technical Analysis Breakdown
1. Resistance and Support Levels
The USD/JPY chart reveals localized resistance and support zones that are shaping current price dynamics:
– Immediate resistance: 147.50 – 148.00, which marks the cap on recent bullish attempts.
– Main support: 146.20, which held in recent sessions, preventing deeper bearish movements.
– Additional minor support: 145.80, acting as a near-term floor for impending moves.
The failure to break clearly through the 147.50 level shifted momentum back in favor of sellers, reinforcing the strength of this resistance. If the pair manages to remain below this zone, further corrective declines could be anticipated.
2. Candlestick Behavior
The latest candlestick formations indicate a loss of momentum:
– Multiple upper wicks observed near the 147.50 resistance zone, suggesting rejection of higher prices.
– Bearish candle formations following the rejection signal that sellers are attempting to regain control.
– Limited buying pressure in subsequent sessions confirms weakness on the bullish side.
3. Trend Channel Observations
The USD/JPY pair had previously been trading within an upward channel, characterized by higher highs and higher lows. However, recent movement has begun to diverge:
– The price approached the upper band of the ascending channel but failed to break through convincingly.
– Instead, it drifted lower toward the channel midpoint, possibly foreshadowing a downward correction.
– A confirmed breach below the lower boundary of the channel (around 145.80 – 146.00) could activate further bearish targets.
4. Moving Averages Outlook
Key moving averages offer useful insights into underlying market sentiment:
– The 50-day EMA currently runs near 146.40, providing nearby dynamic support.
– The 100-day EMA sits near 145.60, offering a more substantial support zone if losses accelerate.
– Price action flirting with these levels suggests a potential shift in trend if these averages are broken.
If the pair manages to hold above these EMAs, bulls may attempt another upside push. However, failure to sustain above them opens the door to further declines.
5. RSI and Momentum Indicators
Momentum oscillators are signaling caution, validating the idea of a weakening bullish wave:
– Relative Strength Index (RSI) is pulling back from overbought territory, indicating declining buying interest.
– The RSI hovers near the 55 level. A drop below 50 would confirm a bearish momentum shift.
– MACD (Moving Average Convergence Divergence) shows a tightening spread between
Explore this further here: USD/JPY trading.