Title: USD/JPY Seeks to Establish Higher Support Amid Ongoing Bullish Attempt
Source: Adapted and expanded from analysis originally published by Economies.com on July 30, 2025. Full credit to the original author.
The USD/JPY currency pair is currently navigating a critical juncture in the wake of ongoing market fluctuations and policy speculation. Market participants have observed a steady upward movement over recent sessions, with indicators pointing to a potential attempt by the pair to establish a new rising low. This pattern would support a continuation of its bullish trend over the medium term, provided key support levels remain intact.
As the USD/JPY gains traction from favorable macroeconomic data and diverging central bank policy expectations, technical analysis reveals important insights into the pair’s momentum, resistance levels, and the likelihood of sustained upward movement. This article delves deeper into the USD/JPY’s current price action, outlining the factors influencing the trend and the technical levels to watch in the coming days and weeks.
Key Price Action and Technical Trend Analysis
– The USD/JPY price approached the support zone near 156.50 earlier this week, briefly breaching it to the downside before rebounding; this suggests a possible formation of a rising low, reinforcing bullish momentum.
– Current price movement is testing the 157.40 level, a short-term resistance point that needs to be broken for the bullish trend to continue with renewed strength.
– The ascending channel that has guided the USD/JPY throughout July remains valid, highlighting the market’s intent to trend higher in line with broader U.S. dollar strength.
– The pair’s ability to hold above 156.50 in the near term will be critical in determining the validity of the rising low structure.
Indicators Confirm Positive Outlook
Several technical indicators support the view that the USD/JPY may be ready to resume its upward movement:
– The 50-day Exponential Moving Average (EMA) has continued to slope upwards, acting as dynamic support and reinforcing the structure of the bullish trend.
– The Relative Strength Index (RSI) remains above 50, though not yet in overbought territory, suggesting there is still room for upside engagement without triggering correction pressure.
– The Moving Average Convergence Divergence (MACD) remains above its signal line, indicating that bullish momentum is intact and may continue if the pair breaks through short-term resistance.
Support and Resistance Levels to Watch
Price action within the current technical range has formed a short to medium-term trend channel. Traders should pay close attention to the following levels, which are critical for identifying breakout or reversal points:
Key Support Levels:
– 156.50: Previously tested as support; will confirm a rising low if the price holds above this level on a sustained basis.
– 155.80: A significant lower support area, the loss of which could expose the market to further declines toward 154.60.
– 154.60–154.00: A key support cushion that would mark the boundary where the medium-term bullish structure begins to break down.
Critical Resistance Levels:
– 157.40: Immediate resistance; a sustained break above this level will likely activate bullish acceleration.
– 158.30: Next upside target if the 157.40 ceiling is breached, representing the previous high from earlier in the month.
– 160.00: A psychological and technical resistance based on long-term charts, which could become reachable in August if the upward momentum remains unbroken.
Fundamental Drivers and Broader Market Context
Beyond technical levels, several fundamental developments are impacting the USD/JPY’s performance in global currency markets. Chief among them are the diverging monetary policy directions between the U.S. Federal Reserve and the Bank of Japan (BoJ), economic data releases, interest rate differentials, and investor risk appetite.
Key Fundamental Factors Driving USD/JPY:
1. Diverging Monetary Policies:
– The Federal Reserve maintained a relatively hawkish stance in its latest FOMC announcement, reinforcing expectations
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