Title: USD/JPY Forecast: Path to a Higher Low in Focus
Source Credit: Economies.com, Original Analysis Published on September 29, 2025
Original Author: Economies.com Analysis Team
URL: https://www.economies.com/forex/usd-jpy-analysis/the-usdjpy-is-looking-for-higher-low–analysis-29-09-2025-121475
As global markets remain volatile and traders continue to assess macroeconomic indicators from the United States and Japan, the USD/JPY pair enters a critical technical phase. The pair has shown movements suggesting a potential development of a higher low pattern, pointing toward a possible continuation of the upward momentum. Below, we provide an extended and comprehensive analysis of the situation based on technical indicators and market dynamics, following the insights from Economies.com.
Overview of Recent USD/JPY Price Action
In recent trading sessions, USD/JPY experienced a corrective decline following earlier bullish momentum that saw the pair reach important resistance levels. The selling pressure that triggered the correction was largely technical in nature, as the pair tested overbought levels in the short term. However, current technical behavior suggests that this downward move could be establishing a higher low, which might serve as a base for the next upward impulse.
Key Observations:
– After encountering resistance near multi-month highs, USD/JPY started a consolidation phase.
– The pair pulled back but has not broken below critical short-term support.
– Price action remains above the 50-day Simple Moving Average (SMA), which continues its upward slope.
– Momentum indicators such as the Relative Strength Index (RSI) remain in bullish territory, currently positioned just below the overbought zone.
Technical Analysis: Support and Resistance Levels
Resistance Zones:
– Immediate resistance is found around 149.00, a level that previously acted as a supply zone.
– The psychological round figure at 150.00 remains a key resistance. A firm break above this could open the door toward higher long-term targets around 151.50 and 152.20.
Support Levels:
– Initial support lies near the recent low at 148.00, where buying interest appears to have emerged.
– Additional support can be observed near 147.30, coinciding with the 50-day SMA.
– A break below this could test the more robust support at 146.20, followed by 145.00.
Moving Averages and Trend Confirmation
The behavior of moving averages continues to favor the bullish outlook:
– The 50-day SMA is trending upward, reinforcing medium-term bullish sentiment.
– The 100-day SMA also ascends, although at a more moderate slope, confirming the underlying uptrend.
– Price action remains above both moving averages, which often indicates active buying interest on dips.
Momentum Indicators and Oscillators
Momentum analysis suggests the pullback could be transitory, aligning with the possibility of a higher low formation:
– The RSI has decreased slightly during the pullback but remains above the 50 mark, which typically supports bullish bias.
– The MACD histogram displays narrowing bars, hinting at bearish momentum weakening. A bullish crossover may soon form if the current price trend reverses upward.
– The Stochastic Oscillator has exited overbought conditions and is now in a neutral zone, indicating the pair has room to move higher before encountering fresh bearish pressure.
Fibonacci Retracement Analysis
When applying Fibonacci retracement levels to the upward wave that started earlier in September:
– The 38.2% Fibonacci level aligns with recent support at 148.00, acting as a potential area for demand resurgence.
– The 50% retracement level lies near 147.50, offering additional support and a secondary buying opportunity for bulls.
– These retracement levels strengthen the case for the ongoing pullback to form a higher low before new bullish continuation.
Macro and Fundamental Factors Impacting USD/JPY
Alongside technical indicators, macroeconomic fundamentals play an essential role in the
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