On the daily chart, the USD/JPY pair shows a bullish technical bias after breaking the 159.00 resistance level, which repeatedly capped upside attempts since September. The pair has now approached the psychologically important 160.00 mark and moved into a consolidation phase; verbal warnings about possible currency intervention triggered a moderate pullback on Thursday.
The bullish breakout is confirmed by the pair trading above the 100-day simple moving average (SMA) near the round 159.00 level, and also above the 200-day SMA (158.65). The relative strength index (RSI) sits around 62, indicating positive momentum while remaining below overbought territory.
A confident close above 160.00 would open the way to the next resistance at 160.40, which in turn could set the stage for further gains toward the round 161.00 level. However, concerns about potential intervention could make any move above that area highly volatile.
Conversely, if the pair fails to decisively clear 160.00, profit-taking could be triggered. In that case, the nearest meaningful support would be at 159.00, reinforced by the 100-day SMA. A break of this zone would weaken the current bullish case, opening the path to the 200-day SMA (around 159.00) and then to the horizontal support at 157.80, where the 200-day EMA runs.
At present, the technical impulse favors further upside, but the proximity of 160.00 creates a delicate market situation. The question is not only whether the dollar can continue to rise, but whether Japanese authorities will allow it to do so without resorting to countermeasures.
