Title: USD/JPY Faces Continued Downward Pressure – Technical Analysis Report (July 22, 2025)
Original article by Economies.com. Expanded and rewritten for clarity and depth.
Introduction
The USD/JPY currency pair continues to experience bearish momentum, with technical indications suggesting further downward movement in the short to medium term. As global uncertainty increases and monetary policy divergence fades, the pair finds itself under pressure. This comprehensive analysis will delve into the key drivers behind the current bearish trend, examine the major support and resistance levels, and outline potential scenarios traders should be aware of in the coming sessions.
Technical Overview
• The USD/JPY pair began today’s trading session with a strong bearish inclination.
• The price broke through the 50-day EMA (Exponential Moving Average), indicating that selling pressure is intensifying.
• Resistance levels that were previously holding firm have now turned into key resistance markers, reinforcing the bearish outlook.
• The MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) both suggest continuation to the downside.
• Short-term price action points toward extended selling unless a fundamental reversal occurs.
Price Performance Recap
During the early hours of today’s trading session, the pair attempted to regain upward strength but instead encountered resistance near the 157.00–157.30 range. After failing to break above this zone, the pair reversed direction and fell below the support zone around 156.50.
Key Bearish Indicators
• The pair decisively breached the 50 EMA, which has historically acted as intermediate support.
• Momentum indicators such as the RSI hover near oversold territory, while MACD histograms continue to print red bars.
• Repeated failure to surpass recent highs near 157.50 signals seller-dominated sentiment.
Support and Resistance Zones
The following are the major price levels that technical traders are closely monitoring:
Support Levels:
• Immediate support is seen at 155.30 – a level the pair bounced from in mid-July.
• Further downside support lies at 154.50, which aligns with a previously tested multi-week low.
• If bearish momentum intensifies, psychological support is anticipated at the round number 154.00.
Resistance Levels:
• The 50-day EMA, currently at 156.50, will act as the first resistance on any recovery attempts.
• Above this, the 157.00 zone remains a key hurdle due to repeated price rejections.
• A strong break above 157.50 may invalidate the near-term bearish trend and shift sentiment toward recovery.
Trading Volume and Market Sentiment
• Market volume has increased slightly during the downward move, indicating heavier participation on the short side.
• Open interest in USD/JPY futures has also risen, confirming institutional involvement in driving the trend.
• Sentiment from retail traders, as tracked through positioning data, shows net-long exposure increasing, which often serves as a contrarian indicator.
Fundamental Drivers Behind the Bearish Move
While technical indicators suggest a bearish continuation, fundamental factors are also at play. Some of these include:
1. US Dollar Weakness:
• Disappointing macroeconomic data, including weaker-than-expected retail sales and industrial production, have put pressure on the US dollar.
• Growing expectations that the Federal Reserve will hold interest rates steady or possibly cut by the end of Q3 2025 contribute to reduced support for the greenback.
2. Bank of Japan’s Policy Outlook:
• The Bank of Japan has adopted a more cautious stance in its latest communication, but consistent inflation data have led to speculation about future tweaks to their yield curve control policy.
• Any sign of Japanese monetary tightening or bond yield realignment can lead to more demand for the yen.
3. Safe Haven Demand:
• With rising geopolitical tensions and uncertainty over global economic recovery, investors are placing bets on the Japanese yen as a safer asset.
• Consequently, USD/JPY sees increased selling as funds flow into the yen.
4. Interest
Explore this further here: USD/JPY trading.