Title: USD/JPY Maintains Bullish Momentum: Technical Analysis and Outlook
Source: Adapted from an article originally published on Economies.com by the analysis team
URL: https://www.economies.com/forex/usd-jpy-analysis/the-usdjpy-shows-positive-signs–analysis-07-10-2025-121682
Overview:
The USD/JPY currency pair has demonstrated positive price movement signals as of October 7, 2025. Following a brief downward correction in recent sessions, the pair has begun to rise again, suggesting renewed bullish interest and potential continuation of the upward trend that has defined much of the recent trading activity. This analysis delves into the technical indicators, price action patterns, and projected targets for the pair, with a focus on identifying levels of support and resistance that traders and investors should monitor closely.
Current Price Behavior:
The USD/JPY exhibited a recovery during the early trading hours of October 7, resuming an upward movement after finding support above key technical levels. The pair’s recent behavior underscores a likely continuation of the bullish trend, driven in part by macroeconomic factors such as interest rate expectations in the United States and risk sentiment across the global markets.
Key observations regarding recent price movement include:
– Strong rebound from a previous local low, suggesting the end of a minor correction.
– Formation of a higher low, typically a bullish signal in trend continuation scenarios.
– Sustained price action above the 50-day exponential moving average (EMA), often viewed as a bullish indicator.
Technical Indicators Analysis:
Technical indicators are offering confirmation of the emerging bullish scenario. The chart setups, volume trends, and momentum indicators suggest an active buying interest in the pair.
1. Moving Averages:
– The 50-day EMA remains above the 100-day EMA, indicating sustained upward momentum.
– Price action is consistently holding above both averages, which reinforces the bullish bias.
2. RSI (Relative Strength Index):
– The RSI is currently positioned in bullish territory, hovering around the 60-70 mark.
– This reading implies that gains have not yet reached overbought levels, so further appreciation is possible before corrections occur.
3. MACD (Moving Average Convergence Divergence):
– The MACD line is above the signal line, another indicator of bullish momentum.
– A widening gap between the MACD and signal lines supports the potential for further upside.
4. Trendlines:
– The pair remains within the confines of an ascending channel that has guided price action in recent months.
– Support drawn from the lower channel boundary continues to hold accurately, indicating strong trend alignment.
Price Forecast and Target Levels:
Assuming the current bullish momentum continues, USD/JPY is expected to test and potentially breach prior highs in the upcoming sessions. A structured projection of the upcoming scenarios includes target zones and risk levels.
Short-Term Outlook (1 to 3 days):
– Initial Resistance Zones:
– 149.80: A minor resistance area formed by previous local highs.
– 150.60: A psychologically significant round-number resistance.
– Support Levels:
– 148.00: Near the recent low and a short-term support base.
– 147.30: A pivotal level associated with the 50-day EMA.
If the currency pair successfully clears the 150.60 range, further upside may be unlocked. Price extension beyond this point will depend on not only technical validation but also fundamental catalysts including statements from the Federal Reserve and Bank of Japan.
Medium-Term View (1 to 3 Weeks):
In the medium term, the bullish trend remains valid as long as support at 147.30 holds. Failure to maintain above this level could trigger a broader correction, potentially driving the pair toward deeper support near 145.90.
Upside Potential:
– Target: 151.40 (based on Fibonacci extensions and historic resistance levels).
– Higher Range: 152.00 to 152.60
Explore this further here: USD/JPY trading.