**USD/JPY Analysis: Pair Sustains Bullish Momentum**
*Adapted and expanded from analysis originally published by Economies.com on August 27, 2025.*
The USD/JPY currency pair continues to preserve its strong upward trajectory, building on its earlier gains as trader sentiment continues to favor the US dollar over the Japanese yen. This sustained bullish momentum supports a positive view for the near-term outlook, suggesting that further upward movements remain likely.
**Key Technical Developments**
– The USD/JPY pair recently exhibited clear bullish strength, pushing further above the previously established resistance levels.
– Technical indicators support the ongoing upward channel, with price action trending comfortably above the 50-day Simple Moving Average (SMA).
– The pair’s persistence above the key support zone around 146.00 provides additional confidence in the ongoing rise.
**Fibonacci Levels and Potential Resistance**
– The most recent price surge allowed the currency pair to penetrate the 147.00 area, a psychologically significant level with historical importance.
– Technical analysts expect potential further movement toward the 148.50 mark, which aligns closely with the 61.8% Fibonacci projection based on previous downward corrections.
– Resistance could then be encountered near the 150.00 level, marking a long-term target that would signify a strong continuation of the broader bullish trend.
**Momentum Indicators Analysis**
– The Relative Strength Index (RSI) remains above the 60 mark, confirming buyers continue to dominate.
– The Moving Average Convergence Divergence (MACD) also reflects a healthy bullish structure, with the MACD line staying above its signal line and histogram bars expanding.
**Short-Term Trading Strategy**
– As long as the USD/JPY pair holds above the short-term support at 146.00, traders may continue to look for long entry opportunities.
– A pullback toward the 146.50–146.00 range could offer a new buying opportunity, provided bullish reversal signals emerge.
– Protective stops could logically be placed below the 145.50 zone, minimizing downside risk should the pair experience unexpected volatility.
**Medium-Term Outlook**
– If momentum persists and the pair breaks decisively above 148.50, a clear path may open for a rally toward the psychological resistance at 150.00.
– The confluence of technical tools, including moving averages, trendline support, and RSI levels, all point to a continuation of the prevailing upward trend.
– Traders should monitor US economic data, Federal Reserve comments, and risk sentiment that could influence the dollar’s strength and impact the pair’s direction.
**Fundamental Factors Supporting USD Strength**
Several economic and geopolitical elements are contributing to the strength of the US dollar, which in turn plays a critical role in the bullish movement of the USD/JPY pair.
1. **Interest Rate Differentials**
– The Federal Reserve has maintained a hawkish stance, suggesting the possibility of further rate hikes or an extended period of high rates.
– In contrast, the Bank of Japan (BoJ) continues to utilize ultra-loose monetary policy, including negative interest rates and asset purchases, keeping the yen weak against the dollar.
2. **Inflation in the United States**
– Recent inflation data from the US indicates stubbornly high price levels, encouraging the Fed to remain vigilant.
– This supports higher yields on US Treasury bonds, attracting global investors and strengthening USD demand.
3. **Labor Market Resilience in the US**
– Non-Farm Payroll (NFP) reports have shown consistent strength, with low unemployment and steady wage growth.
– These indicators further increase the possibility of extended Fed tightening, a bullish sign for the dollar.
4. **Japan’s Economic Stagnation**
– Despite minor recovery signs, Japan’s economy faces lingering issues, including low productivity, demographic challenges, and weak domestic demand.
– As a result, the BoJ is unlikely to deviate significantly from its dovish policies, leaving the yen vulnerable.
**Investor
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