It looks like USD/JPY is still stuck in its longer-term range, as the pair sustained a bounce off support to make it back to the top.
Will the ceiling still hold?
Or are we about to see a breakout soon?
USD/JPY 4-hour Forex Chart by TradingView
Remember that USD/JPY range support bounce we had our sights set on the other week?
Well, the pair was able to gain traction on its rally enough to climb close to the range resistance at the 148.00 major psychological mark as tariffs headlines lifted the safe-haven dollar.
So which way will the pair go from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the U.S. dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The upcoming U.S. CPI release could set the tone for dollar price action early in the week, as forecasts are pointing to a possible upside inflation surprise that could dampen dovish Fed expectations.
Should USD/JPY be able to form long green candlesticks closing above the range resistance, look out for a rally that could take it up to the next upside target at R2 (149.68) or even a climb that could last by the same height as the rectangle pattern.
On the other hand, reversal candlesticks forming at the top of the range could keep USD/JPY in consolidation mode, possibly falling back to nearby support levels at the pivot point level (146.38) then S1 (145.24).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
