Title: USD/JPY Extends Bearish Momentum: In-Depth Analysis
Original Author: Economies.com
Date: July 24, 2025
The USD/JPY currency pair continues to exhibit a strong bearish tone, as it extends its recent losses following a series of negative technical indicators and a broader deterioration in investor sentiment towards the US dollar. Speculative positioning, shifting macroeconomic expectations, and technical patterns are converging to pressure the pair further to the downside. Below is a detailed breakdown of the factors impacting USD/JPY as of July 24, 2025.
Current Market Overview
As of today’s trading session, USD/JPY is facing heightened bearish pressure, retreating further from recent resistance levels. It has broken through critical support zones, validating the continuation of a downtrend that has been shaping up over recent days.
Key Observations:
– The pair has breached the 141.50 support level, which previously acted as a crucial psychological and technical barrier.
– Momentum indicators, particularly the Relative Strength Index (RSI), continue to signal downside momentum with bearish divergences across key timeframes.
– The price remains below the exponential moving average (EMA) for both the 50-period (short-term) and 100-period (medium-term), confirming the strength of selling pressure.
– Trend formations point to an acceleration in bearish sentiment, particularly after failing to sustain above previous resistance at the 143.25 mark.
Technical Indicators Supporting the Downtrend
Multiple technical tools are reinforcing the continuation of a bearish wave. These indicators not only suggest that sellers are in control but also highlight potential future support levels where the pair may stabilize or reverse if sentiment changes.
– Exponential Moving Averages:
• The 50-period EMA is sloping downward and now acts as dynamic resistance.
• The 100-period EMA is positioned well above the current price level, indicating bearish alignment.
– RSI Analysis:
• The RSI has dropped below 40, a clear signal of increasing selling strength.
• No sign of bullish divergence, which would normally indicate a potential bottom.
– MACD Histogram:
• The MACD line is below the signal line and continues to drift into negative territory.
• Momentum is building in favor of the bears despite minor intraday retracements.
Key Support and Resistance Levels
Investors must monitor both nearby support and resistance to anticipate market behavior. As the pair continues downward, the following zones are of interest:
– Immediate Support:
• 140.70: This represents the next area of minor support, previously tested during the last corrective cycle.
• 139.80: A key Fibonacci level that overlaps with the prior consolidation zone.
• 138.95: Considered a major area of historical support where demand significantly picked up in past sessions.
– Resistance Levels:
• 142.15: Recent breakdown point; now likely to act as resistance if tested.
• 143.25: The high of the most recent bullish correction and a critical resistance to watch if the trend attempts a reversal.
• 144.40: A major resistance level that coincides with the 100-period EMA and the previous swing high.
Fundamental Drivers Behind the Bearish Outlook
The broader sell-off in USD/JPY is not occurring in isolation. Several fundamental developments have emerged over the past few days that support the technical bearish trend:
– Softening US Inflation Expectations:
• Lower-than-anticipated CPI and PPI readings for July suggest diminishing price pressure.
• Reduced inflation expectations are leading investors to speculate that the Federal Reserve may pause or slow further interest rate hikes.
– Deterioration in US Yields:
• A flattening of the US Treasury yield curve, particularly as 10-year yields decline, is making the dollar less attractive to investors.
• Japanese government bond yields remain relatively stable, narrowing the yield differential that previously favored the US dollar.
– Risk-Off Sentiment and Safe Haven Demand
Explore this further here: USD/JPY trading.