Title: USD/JPY Poised to Establish a Higher Low: In-Depth Technical Analysis
Original Source: Economies.com | Original Author: Economies Team
Published: September 29, 2025
Link: https://www.economies.com/forex/usd-jpy-analysis/the-usdjpy-is-looking-for-higher-low–analysis-29-09-2025-121475
The USD/JPY currency pair remains within a broader bullish structure, showing persistent upward momentum despite recent retracements. The pair has experienced a temporary pullback but maintains its positioning above key technical levels, suggesting that it could be preparing to establish a higher low before resuming its upward trajectory.
This analysis takes a closer look at recent price actions, support/resistance levels, trend indicators, and potential scenarios for the USD/JPY pair.
Technical Overview
– The USD/JPY pair started the trading session on September 29, 2025, with a slight decline, placing moderate downward pressure on the price.
– However, from a broader technical standpoint, this movement is being interpreted as a temporary retracement rather than a trend reversal.
– The retreat is being absorbed by a significant support level formed by the 50-period Exponential Moving Average (EMA) on the four-hour chart.
– The current structure and technical indicators suggest that the pair may be creating a higher low, a typical pattern within a continuing uptrend.
Key Support Levels
Identification of critical support zones is essential for confirming that the pullback is temporary and identifying a strategic area for potential bullish entries:
– The 50-period EMA lies near the 147.50 support level, acting as a dynamic support barrier.
– Static support is seen around the 147.30-147.50 range, which has historically had influence in holding back downward corrections.
– Falling below this level could lead to a deeper retracement toward:
– 146.90: Previous swing low providing intermediate support.
– 146.00: Psychological level and a well-tested historical support area.
Resistance Levels to Watch
If the USD/JPY succeeds in establishing a higher low and resumes its upward move, the following resistance areas must be overcome for continued bullish progress:
– 149.20: Recent swing high serving as initial major resistance; a daily close above this would confirm breakout strength.
– 150.00: A psychological milestone and key bullish target that may invite profit-taking or heightened volatility.
– 150.50 and 151.90: Higher resistance levels that reflect yearly highs and represent rally continuation zones.
Price Action and Market Sentiment
– The current price action reflects a healthy correction within an upward channel.
– Market sentiment remains supportive of the bullish outlook due to continued divergence between U.S. and Japanese monetary policies.
– The Bank of Japan has remained dovish, maintaining ultra-low interest rates and adopting a cautious approach toward monetary tightening. Conversely, expectations that the U.S. Federal Reserve could retain higher interest rates for an extended period support the greenback’s yield advantage.
From a structural point of view:
– Price continues to make higher highs and higher lows, reinforcing the prevailing bullish trend.
– Buyers consistently re-enter the market during corrections, highlighting strong underlying demand for the USD.
Momentum Indicators
An analysis of technical indicators further supports the bullish bias:
– Relative Strength Index (RSI):
– Currently hovering around the neutral 50 level after retreating from overbought conditions.
– No bearish divergence noted, which suggests bullish momentum could resume once consolidation ends.
– Moving Averages:
– The 50-period EMA remains above the 100-period EMA in the four-hour timeframe, indicating bullish alignment.
– Price consistently finds support near the 50 EMA following temporary setbacks.
– MACD (Moving Average Convergence Divergence):
– MACD line remains above the signal line on the daily chart, albeit narrowing, which supports continued long-term bullish momentum.
Forecast Scenarios for USD/JPY
Explore this further here: USD/JPY trading.