The USD/JPY moved higher toward a key resistance zone defined by the 100-hour moving average (MA) and an important swing area. Initially, the pair declined during the US market open as traders favored the safety of the Japanese yen amid risk-off sentiment. This decline contrasted with the general trend of US dollar appreciation.
The situation shifted following the announcement of the US-Mexico truce, which will last for at least a month, prompting a more bullish outlook for the USD/JPY. The pair rebounded but hit resistance within the swing area between 154.77 and 154.96, encountering further resistance at the 100-hour MA positioned nearby. This resistance area has effectively stalled the rally.
For the USD/JPY to continue its upward momentum, it must break through both the swing area and the 100-hour moving average. Until such a break occurs, the bias remains neutral to slightly bearish, with the pair likely to stay within the lower extreme of its recent range. The Japanese yen withstood the US dollar’s onslaught on Monday after President Donald Trump imposed new tariffs, suggesting that investors still see value in the Japanese currency as a haven in times of turmoil.
usd/jpy faces key resistance levels
The yen reversed losses of 0.5% and advanced as much as 0.5% against the greenback, trading at 154.37 per dollar as of 7:33 a.m. in New York. In contrast, other major currencies like the euro, the Canadian dollar, the Australian dollar, and the New Zealand dollar are down around 1% versus the US currency.
Japanese government bonds were also bought as the nation’s stocks showed resilience despite global market volatility. The market’s reaction underscores the yen’s enduring appeal as a safe-haven asset, providing stability and security amid geopolitical and economic uncertainties. The USDJPY price faced new negative pressure yesterday as it broke 154.96 and approached the 153.75 level but returned to trade above the first level.
Sideways trades are expected between the 153.75 support and 156.45 resistance in the upcoming sessions, with the price needing to surpass one of these levels to determine its next direction clearly. A breach of the mentioned resistance will lead the price to resume the main bullish trend and achieve new gains that reach 158.00 followed by 158.87 levels. Conversely, breaking the support will push the price towards additional bearish corrections, targeting 152.55 as the next negative station.
The expected trading range for today is between 154.00 support and 156.10 resistance.
