USD/JPY Price Outlook – Trade Setup
📊 Technical Structure
USDJPY USD/JPY is trading around 155.00, struggling to break above the 155.05–155.18 Resistance Zone, where repeated rejections continue to maintain a short-term bearish bias. Price remains capped beneath this ceiling, with bearish wicks showing supply pressure.
The structure favours a pullback as long as price stays below 155.18. A clean hourly close above this level would invalidate the setup and indicate deeper recovery potential. On the downside, the 154.43–154.56 Support Zone remains the next magnet if rejection continues.
🎯 Trade Setup (Sell Bias)
Entry: 155.05 – 155.18
Stop Loss: 155.30
Take Profit 1: 154.56
Take Profit 2: 154.43
Risk–Reward Ratio: Approx. 1 : 2.23
Bearish idea remains valid as long as USD/JPY stays below 155.18.
A breakout and hourly close above this level invalidates the trade.
🌐 Macro Background
USD/JPY remains trapped in narrow consolidation on Friday, but the broader macro backdrop still favors JPY strength. Despite weak Japanese Household Spending falling 2.9% YoY, the market remains focused on rising expectations for a BoJ rate hike, supported by Governor Ueda’s recent hawkish remarks. Elevated Japanese government bond yields—10-year JGBs at the highest levels since 2007 and 20-year yields near 1999 highs—continue to narrow the rate differential and attract JPY buying.
Meanwhile, the US Dollar struggles to extend its rebound, even after upbeat US labor market data, as traders expect the Federal Reserve to cut rates next week. Fed expectations remain firmly dovish, marking a significant contrast to the BoJ’s tightening bias, keeping upward pressure on the Yen.
Traders remain cautious ahead of the US PCE inflation report, which will act as a key driver for both USD volatility and short-term direction in USD/JPY.
Overall, diverging policy expectations—BoJ hawkish vs. Fed dovish—maintain a bearish macro tone for USD/JPY.
🔑 Key Technical Levels
Resistance Zone: 155.05 – 155.18
Support Zone: 154.43 – 154.56
Invalidation Level: 155.30
Downside Targets: 154.56, 154.43
📌 Trade Summary
USD/JPY continues to face resistance around 155.18, holding a bearish intraday structure. The preferred approach is to sell rallies into the resistance zone, targeting a continuation toward 154.43–154.56. A move above 155.30 cancels the idea and signals a shift in momentum.
⚠️ Disclaimer
This analysis is for reference only and does not constitute trading advice. Trading involves significant risk, and proper risk management is essential.
source https://www.tradingview.com/chart/USDJPY/0Ri8Y08Z-USD-JPY-Price-Outlook-Trade-Setup/
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