Title: USD/JPY Seeking Higher Low After Downward Correction
Original Author: Economies.com
Date: October 10, 2025
Rewritten and Expanded by: [Your Name]
Overview
The USD/JPY currency pair appears poised for recovery following a brief corrective pullback. After a strong rally that recently topped near the 150.00 psychological level, the pair retraced slightly, exhibiting signs of a short-term consolidation. Market participants and technical analysts are now scrutinizing whether the pair is establishing a higher low, a classic bullish continuation signal in technical analysis.
This detailed analysis builds upon the original October 10, 2025, forecast from Economies.com, providing deeper insights into the market setup, technical structure, and macroeconomic influences driving the USD/JPY pair.
Recent Price Action
The USD/JPY experienced strong bullish momentum throughout most of September and into early October. This strength has been supported by the divergent policy stance between the U.S. Federal Reserve and the Bank of Japan (BoJ).
Key Price Points:
– Previous Peak: The pair approached the 150.00 level, which has historically served as psychological resistance and a zone where Japanese authorities monitor for potential intervention.
– Current Support: The short-term corrective retracement has seen the price find support near 148.25, a level that may act as the base for a higher low.
– Trading Range: Recently, the USD/JPY has been oscillating within the 148.25 – 149.80 range, suggesting short-term consolidation and indecision ahead of key U.S. economic releases.
The formation of a higher low will arguably be a bullish signal, potentially reigniting upward momentum and opening the door for a retest of the 150.00 resistance zone.
Technical Analysis
The technical configuration of USD/JPY, particularly as it relates to the overall trend, favors further upside movement, assuming certain conditions are met.
Key Technical Indicators:
– Trend Direction: The pair remains firmly in an uptrend on the 4-hour and daily charts, characterized by higher highs and higher lows.
– Moving Averages: The 50-period Exponential Moving Average (EMA) remains above the 100-period EMA, reflecting bullish momentum.
– Fibonacci Levels: The recent pullback hovers near the 38.2% Fibonacci retracement of the most recent upward leg from 146.25 to 149.80, suggesting potential for a rebound.
Support and Resistance Levels:
– Immediate Support: 148.25 – Possibly the level forming a higher low.
– Secondary Support: 147.60 – A break below here may indicate a deeper pullback.
– Resistance Levels:
– 149.80 – The near-term ceiling established in recent sessions.
– 150.00 – A psychologically significant barrier that could attract both sellers and intervention risk.
– 151.30 – The next notable resistance if the 150.00 level is breached decisively.
Momentum Oscillators:
– Relative Strength Index (RSI): Hovering near 55 on the 4-hour chart, suggesting bullish potential but lacking strong overbought or oversold signals.
– MACD (Moving Average Convergence Divergence): Histogram and signal line are flattening, indicative of momentum loss during the consolidation. However, no bearish crossover has occurred.
Technical Summary:
– As long as USD/JPY holds above 148.25 and particularly 147.60, the bullish trend remains valid.
– A confirmed move back above 149.80 would validate the higher low formation and suggest continuation of the broader uptrend.
– Failure to hold support could temporarily weaken the bullish outlook, possibly dragging the pair toward more significant support zones near 146.70.
Fundamental Drivers
The upward momentum that has characterized the USD/JPY pair for several months is largely underpinned by the divergent monetary policies of the Federal Reserve and the Bank of Japan.
Federal Reserve (U.S.)
– Interest Rate Outlook:
Explore this further here: USD/JPY trading.