Title: USD/JPY Strives to Establish a Rising Low: Technical Analysis
Original article by Economies.com, analysis dated September 4, 2025.
The USD/JPY currency pair continues to demonstrate resilience in an overall upward trend, navigating short-term corrections with an eye toward resuming its primary bullish path. Recent market action confirms that the pair is attempting to form a new higher low, which could fuel the next leg up in the prevailing bullish structure. Technical indicators and chart patterns support this outlook, suggesting that consolidation is likely temporary and that bulls may regain control if certain support levels hold.
In this analysis, we delve into the technical factors influencing the pair, key levels to watch, and scenarios that may emerge based on the interplay between bullish momentum and short-term consolidation. The aim is to provide a comprehensive perspective on what traders can expect in the near term, grounded in recent price action and broader market behavior.
Current Technical Outlook
– The pair has recently pulled back after extending its bullish run.
– This pullback is currently testing critical support areas that may determine the market’s next direction.
– Price action shows the market attempting to build a higher swing low, a characteristic element of a strong bullish structure.
– The prevailing bullish trend remains intact as long as price holds above key support levels.
Bullish Trend Structure
Despite a temporary pullback, the overall bias for USD/JPY remains bullish. The larger structure supports the view of a market that is simply retracing recent gains before making another move higher. Several factors validate the bullish perspective:
– The pair remains above the 50-day Exponential Moving Average (EMA), which is sloping upward and acting as dynamic support.
– Sequential higher highs and higher lows continue to form on the 4-hour and daily charts.
– Fib retracement levels drawn from the most recent swing low to the swing high suggest current consolidation respects the 38.2 percent Fibonacci level, indicating strong buyer interest around these zones.
Key Support and Resistance Levels
Identifying key price levels is crucial in determining where price action may head next. Recent trading activity points to several levels that traders are watching closely.
Important Support Zones:
– 144.00 – 144.50 zone: Technical confluence with the 50-day EMA and the 38.2 percent Fibonacci retracement of the last major upswing.
– 143.30: A previous swing low that coincides with the 50 percent Fibonacci retracement. A break below this level would risk undermining the bullish structure.
Resistance Areas to Watch:
– 146.85: Recent high that failed to break further. Price needs to clear this barrier to successfully resume the bullish trend.
– 147.50: A psychological resistance level and a historical zone where sellers have previously stepped in.
– 148.30: Next potential target if bullish momentum continues to strengthen after breaking beyond current resistance areas.
Trend Continuation or Correction?
While price action is currently in retracement mode, the structure hints that this may simply be a corrective move before the larger bullish trend resumes. Traders and analysts are closely monitoring if price can maintain strength above key support levels. If it does, there is a higher likelihood that a fresh rally leg will develop.
Scenarios to Consider
Depending on the coming sessions’ price action, two primary scenarios can unfold:
Bullish Continuation (Primary Scenario)
– Price finds support around the 144.00 zone.
– Bullish candlestick formations emerge, such as bullish engulfing or pin bar patterns signaling trend reversal.
– Momentum indicators like the Relative Strength Index (RSI) and MACD start showing positive divergence or upward crossovers.
– If momentum returns and price breaks above the recent high near 146.85, fresh bullish momentum could lead the pair towards 147.50 and even 148.30.
Bearish Breakdown (Alternative Scenario)
– If selling pressure intensifies and 144.00 fails to hold, price may drop to test 143.30.
Explore this further here: USD/JPY trading.