Title: USD/JPY Faces Continued Downward Pressure: Technical Analysis and Outlook
Author Credit: Adapted from an article originally published on Economies.com
Date of Original Article: September 1, 2025
Original Author: Economies.com Analyst Team
Source: https://www.economies.com/forex/usd-jpy-analysis/the-usdjpy-is-under-negative-pressure–analysis-01-09-2025-120737
Overview:
The USD/JPY currency pair is currently under mounting negative pressure, continuing a downward trajectory that has been observed in recent trading sessions. Despite brief attempts at recovery, the dominant bearish trend remains intact. This continued price action aligns with prevailing technical indicators and fundamental factors that are contributing to the pair’s weakness.
Market Background:
– The US dollar began the month under moderate selling pressure across major currency pairs as traders adjust positions in light of new macroeconomic data.
– The Japanese yen, traditionally seen as a safe-haven currency, is displaying resilience amid heightened geopolitical and economic uncertainties.
– The recent downward movement in USD/JPY continues to support a more sustained bearish outlook pending confirmation of certain technical levels.
Price Action Review:
– USD/JPY opened the day near the 146.00 mark but came under immediate selling pressure, pushing it below key support levels.
– The pair currently trades near 145.20–145.50, marginally above the 144.90 support zone.
– This level has acted as a short-term floor, but continued bearish momentum threatens to break this barrier.
Technical Indicators and Chart Analysis:
– The pair has been fluctuating below the 50-period exponential moving average (EMA) on the four-hour chart, signaling sustained downside risk.
– Relative Strength Index (RSI) readings are trending below 50, not yet in oversold territory but indicating growing bearish sentiment.
– The MACD (Moving Average Convergence Divergence) histogram recently turned negative, with signal lines forming a bearish crossover.
– Candlestick formations support a near-term continuation of the decline after recent rejections around the 146.20 level.
Support and Resistance Levels:
Key Support Levels:
– 144.90: Immediate support and a critical short-term pivot. A confirmed break below this level could lead to further declines.
– 144.00: Psychological support and historical demand area. Traders may react strongly to any test of this zone.
– 143.60: Previous reaction low and technical floor from earlier in August.
Key Resistance Levels:
– 145.80: Minor resistance and a retracement level based on the Fibonacci sequence from the last bearish impulse.
– 146.20: Recent price ceiling where selling resumed with strength, indicating the presence of strong supply.
– 147.00: A crucial resistance from a medium-term perspective. A move above this level could signal a trend reversal.
Short-Term Trade Outlook:
Given current technical formations and price action:
– Bears remain in control as long as USD/JPY trades below the 146.20 level.
– A break below 144.90 would likely confirm continuation of the downtrend, targeting 144.00 and 143.60 in subsequent sessions.
– Consolidation above 144.90 without breaking resistance at 146.20 may lead to sideways movement or corrective rallies that ultimately attract sellers.
Medium-Term Bearish Scenario:
– The US dollar’s recent weakness is tied to speculation over future Federal Reserve rate decisions and softening economic data.
– Continued strength in the Japanese yen is driven by improving trade balances and safe-haven demand in response to global risk-off sentiment.
– If current conditions persist, USD/JPY could begin forming lower highs and lower lows, confirming a shift into a more established downward trend.
Potential Catalysts for Price Movement:
Market-moving events and data that could impact the pair include:
– Upcoming US labor market data, including the Non-Farm Payrolls (NFP) report and unemployment figures. Weak results are likely to pressure the USD
Explore this further here: USD/JPY trading.