USDJPY Technical Analysis – We are trading at a key resistance

Fundamental Overview

The USD appreciated a little the day after the FOMC decision although it seemed more like a technical pullback as the central bank didn’t offer anything new. In fact, the Fed just delivered on expectations keeping rates steady, reducing the QT pace, revising growth lower and inflation higher, and keeping the dot plot mostly unchanged.

Fed Chair Powell just acknowledged the current uncertainty around Trump’s policies and the inflation outlook but confirmed that the economy remains healthy, and the Fed is in a good position to wait for more clarity. The market is pricing around 69 bps of easing by year-end.

On the JPY side, the BoJ kept everything unchanged as expected with the statement acknowledging heightened uncertainty surrounding Japan’s economy, adding a new reference to the "evolving situation regarding trade."

This suggests that policymakers are closely monitoring Trump’s tariff policies, with global trade developments remaining a key risk factor for Japan's outlook. The market continues to expect 33 bps of tightening by year-end with particular focus on inflation data.

USDJPY Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDJPY is testing the major trendline. This is where we can expect the sellers to step in with a defined risk above the trendline to position for a drop into the 140.00 handle. The buyers, on the other hand, will look for a break higher to start targeting the 160.00 handle next.

USDJPY Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more clearly the bearish setup around the trendline that may end up in a double top at this strong resistance zone around the 150.00 handle. The sellers will likely pile in around these levels with a defined risk above the trendline, while the buyers will need to see a break higher to gain more conviction for further upside.

USDJPY Technical Analysis – 1 hour Timeframe

On the 1 hour chart, there’s not much else we can add here as the sellers will look for a rejection around these levels, while the buyers will look for a break higher. A break below the upward trendline and the neckline of the potential double top at 148.18 will likely increase the bearish momentum. The red lines define the average daily range for today.

Upcoming Catalysts

Today we get the US Flash PMIs. Tomorrow, we have the US Consumer Confidence report. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the Tokyo CPI and the US PCE report.

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