Title: Continued Signs of Weakness in USD/JPY – Technical Analysis
Author: Economies.com
Date: August 6, 2025
Original Source: [The USD/JPY Shows More of the Weakness Signs – Analysis](https://www.economies.com/forex/usd-jpy-analysis/the-usdjpy-shows-more-of-the-weakness-signs–analysis-06-08-2025-120108)
The USD/JPY currency pair has exhibited additional signs of downside pressure, as indicated in technical charts and broader market indicators. After previously testing important support and resistance levels, the pair continues to weaken, suggesting a potential move toward deeper bearish territory in the near term. Market sentiment, technical indicators, and broader economic cues are collectively pointing to sustained weakness in the US dollar against the Japanese yen.
In this detailed analysis, we’ll examine:
– Recent price movement and technical patterns
– Short-term and long-term support and resistance levels
– Indicator-based analysis (including the Moving Average and RSI)
– The prevailing market sentiment surrounding USD and JPY
– Outlook and trading strategy recommendations
Technical Overview
The USD/JPY pair concluded yesterday’s trading with noticeable bearish momentum, falling below key moving averages and support structures. This move consolidates below essential pivot levels and reflects growing bearish strength among traders, potentially opening the door for a bearish wave continuation.
Key technical notes:
– The pair extended its decline and confirmed a bearish trend after failing to hold above the 20-period Exponential Moving Average (EMA).
– The Relative Strength Index (RSI) moved downward, nearing the oversold zone, further reinforcing the selling pressure.
– Price action displayed a successive pattern of lower highs and lower lows, a classic sign of a weakening trend.
Support and Resistance Levels
Understanding the current key levels on both support and resistance sides is crucial for tracking potential entry and exit points.
Support Levels:
– 141.00: This psychological level has previously acted as support during attempts by the USD/JPY to bounce. A breakdown below this could accelerate losses.
– 140.35: A technical support area based on the May and June lows. Breaching this will confirm extended bearish dominance.
– 139.60: The next significant support zone that aligns with the 50% Fibonacci retracement level from the earlier bullish move.
Resistance Levels:
– 142.25: This resistance has developed following the pair’s mid-July consolidation. It represents the upper range of a descending channel.
– 143.70: Concurrent with the 50-period EMA, it’s a strong resistance level that price failed to pierce during a recent bounce attempt.
– 144.80: This marks the beginning of the upper monthly range. A decisive break above this level would be needed to negate the current bearish bias.
Bearish Pressure Indicators
Several leading technical indicators are reinforcing bearish momentum over the short-to-medium term.
1. Moving Averages:
– The USD/JPY has slipped below its 20-period and 50-period moving averages.
– The 20-period EMA is acting as resistance, curving downward, a typical precursor to further drops.
– A bearish crossover of the short-term moving average below the longer-term one was evident in last week’s chart.
2. Relative Strength Index (RSI):
– The RSI indicator moved to approximately the 40-point range.
– This reading suggests fading bullish strength and momentum leaning towards the bearish side.
– Continuation below 30 would confirm oversold conditions and potentially prompt a corrective bounce.
3. MACD (Moving Average Convergence Divergence):
– The MACD histogram is printing red bars below the zero line.
– The MACD line is descending and diverging further from the signal line.
– This is a typical bearish continuation signal, aligning with other technical indicators.
Market Sentiment and Fundamental Backdrop
The USD/JPY pair is not just governed by technical forces; macro
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