Title: USD/JPY Seeks to Consolidate After Gains – In-Depth Analysis
Original Analysis by: Economies.com (Published July 29, 2025)
As the trading week advances, the USD/JPY currency pair is entering a consolidation phase following a series of recent gains. The pair’s technical behavior reflects a balancing act between bullish momentum and the need for correction after prolonged upward pressure. An in-depth examination of the price movement, technical indicators, and potential market catalysts suggests that the pair could either resume its previous bullish trend or enter into a sideways phase in the short term.
This article expands upon the concepts presented in the original analysis from Economies.com, exploring technical setups, support and resistance levels, and macroeconomic factors influencing the USD/JPY pair as of July 29, 2025.
Current Market Status
At the time of writing, the USD/JPY is hovering near a key resistance zone after a moderate pullback on the intraday charts. The bullish sentiment that previously dominated the pair has shown signs of hesitation as traders await further signals from both technical and macroeconomic sources.
Key Observations:
– USD/JPY is currently attempting to fortify its recent gains, inching toward the next significant resistance around 157.00.
– The pair has shown stability around the 156.30 zone, a level that may now serve as immediate support.
– Market momentum remains slightly tilted to the upside, though indicators show signs of overbought conditions that could precipitate short-term corrections.
Technical Analysis Overview
Daily Chart Indicators:
– The Moving Average Convergence Divergence (MACD) indicator sustains its positive bias, albeit with declining bullish histogram bars.
– The Relative Strength Index (RSI) is currently reading just above 60, indicating a moderately overbought condition but still short of extreme levels.
– Price action remains above the 50-day EMA and comfortably above the 200-day EMA, signifying continued bullish long-term sentiment.
Short-Term Support and Resistance Levels:
– Immediate support: 156.30
– Secondary support: 155.60
– Key resistance: 157.20
– Breakout resistance: 158.10
Fibonacci Retracement Levels:
Using the latest upward wave from 154.40 to 157.20:
– 23.6% Fibonacci retracement: 156.58
– 38.2% Fibonacci retracement: 156.10
– 50.0% Fibonacci retracement: 155.80
– 61.8% Fibonacci retracement: 155.48
These retracement levels will act as probable retraction zones if the pair undergoes a corrective pullback in the coming sessions.
Morning Star Pattern Validity:
Evidence of a bullish continuation can be seen from the earlier emergence of a Morning Star candlestick formation, which materialized in late July. This pattern confirmed a reversal from the short-term correction noted around the 154.40 support zone.
If this formation’s implications hold, further upward movement toward the 157.50 and possibly the 158.00 region can be expected in the next few trading sessions.
Volumes and Momentum:
There has been reduced trading volume during the latest candles, typical of a market entering consolidation. This suggests that market participants may be waiting for macroeconomic cues or a breakout above the resistance zone to take directional positions.
Trading Recommendation (Based on Original Analysis from Economies.com):
– Trend: Bullish in the short-term, as long as the price remains above 156.30.
– Technical bias: Positive, targeting 157.50 as the next resistance, with a possible extension to 158.00.
– Caution advised: A daily close below 156.30 could trigger a temporary bearish correction toward the 155.60 level and even 155.00 if selling momentum increases.
Current Fundamental Backdrop
Monetary Policy Divergence Continues to Shape Trends:
USD/JPY trading behavior remains
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