FundamentalOverview

The USD has been on a roughride since last Monday when the dovish Fed’s Bowman comments and the end ofIsrael-Iran conflict saw the market increasing the probabilities for a thirdrate cut in 2025. Yesterday we reached a peak of 69 bps of easing by year-endbefore pulling back to 64 bps after the better than expected USISM Manufacturing PMI and USJob Openings data.

On the JPY side, nothinghas changed fundamentally, and the currency has been mainly driven by the risksentiment. As a reminder, the BoJ kept interest rates unchanged at 0.5% andreduced the bond tapering plan for fiscal year 2026 as expected at the lastmeeting. The BoJ continues to place a great deal on the US-Japan trade deal andthe evolution of inflation before looking at adjusting rates.

USDJPYTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that USDJPY bounced near the key 142.35 support. That’s where we can expectthe buyers to keep stepping in with a defined risk below the level to positionfor a rally into the 148.28 resistance. The sellers, on the other hand,will want to see the price breaking lower to increase the bearish bets into the140.00 handle next.

USDJPY TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the price is testing the downward trendlinethat is defining the bearish momentum. We can expect the sellers to lean on thetrendline with a defined risk above it to keep pushing into the 142.35 leveland beyond, while the buyers will look for a break higher to increase thebullish bets into the 146.28 level next.

USDJPY TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, there’snot much else we can add here as the sellers will look for a drop from theselevels into the 142.35 level, while the buyers will look for a break above thetrendline. We have a minor support at the 143.30 swing low level though.

That’s where we can expectthe buyers to step in to for a break above the trendline with a better risk toreward setup, while the sellers will look for a break lower to increase thebearish bets into new lows. The red lines define the average daily range for today.

UpcomingCatalysts

Today, we get the US ADP data. Tomorrow, we conclude withthe US NFP, the US Jobless Claims and the US ISM Services PMI before the US holidayon Friday.