The following analysis is a restructured and expanded version of the original article titled “The USDJPY is Looking for a Rising Low – Analysis – 30-07-2025,” originally published on Economies.com. All credit goes to the original author of the analysis.
USD/JPY Technical Analysis – 30 July 2025
Overview:
The USD/JPY currency pair has recently seen significant shifts in market momentum, indicating that it may be forming a potential rising bottom in preparation for a new upward move. Technical indicators suggest buying interest could emerge near current levels, but confirmation is needed before adjusting trading strategies. Market participants are closely observing key support zones and are awaiting bullish confirmation signals.
Short-term Price Action:
– The price declined to retest a key support level near 156.65, where the market has shown tentative signs of stabilization.
– The pair is in the process of forming what could be interpreted as a higher low within its broader bullish trend.
– This recent retreat is occurring after the pair failed to sustain gains near monthly highs, where profit-taking and technical resistance capped further rallies.
Key Technical Indicators:
1. 50-Day Exponential Moving Average (EMA):
– The pair is still trading above the 50-day EMA, which is located near 155.70 at the time of writing.
– This suggests that the medium-term trend remains bullish despite short-term retracements.
2. Relative Strength Index (RSI):
– The RSI is holding near the neutral 50 level, indicating market indecision.
– However, a move above 60 could point to renewed bullish momentum, buying interest, and a potential continuation of the prior uptrend.
3. MACD (Moving Average Convergence Divergence):
– The MACD is currently flattening out after a recent bearish crossover.
– A bullish crossover in the MACD lines near the zero level could serve as confirmation of the anticipated rebound.
4. Support and Resistance Levels:
– Immediate support rests at 156.65, the level currently under testing.
– Deeper support is located at 155.50, coinciding with the 50-day EMA and previous swing lows.
– Resistance lies at 158.20, associated with recent highs.
– A break above 158.20 could open the way to 159.40 and further to 160.00.
Current Technical Structure:
– Despite ongoing consolidation, the underlying trend remains bullish.
– Price behavior is forming what may be deemed a ‘bullish flag’ pattern on lower timeframes.
– Traders may interpret the recent pullback as a healthy correction rather than a reversal.
Potential Scenarios for USD/JPY:
1. Bullish Scenario:
– If the price maintains stability above 156.65 and bounces off this support level, the pair may be preparing for another leg higher.
– A confirmed break above 158.20 would likely attract new buyers and push the pair toward higher resistance levels.
– The daily close above 158.20 would be essential for confirming upward momentum and the resumption of the rally.
2. Bearish Scenario:
– A break and daily close below 156.65 could lead to a deeper correction.
– The next support lies at 155.50 followed by 154.20.
– A breach below the 50-day EMA would disturb the medium-term bullish outlook, suggesting that sellers are regaining control.
Market Fundamentals:
– The US dollar remains supported by hawkish comments from Federal Reserve members, who continue to prioritize inflation control through potentially higher interest rates.
– Yields on US Treasury bonds remain elevated, lending strength to the dollar and helping the USD/JPY maintain an upward trajectory.
– On the Japanese side, the Bank of Japan has maintained its ultra-loose monetary policy, despite mild changes in its yield curve control parameters.
– Such a divergence in monetary policy continues to support the broad USD/JPY uptrend.
Risk Catal
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