FX.co ★ USD/JPY

I see the USD/JPY pair is trading at a critical junction today on February 6, 2026. The price is hovering around the 156.81 level. I can feel the market tension rising before the Japanese snap elections. The US Dollar is showing strength against the Yen right now. I am watching the charts closely to spot the next big move. This analysis provides a deep look into the technical and fundamental forces at play. Trading Timeframe I am using a multi-timeframe approach to capture the full market picture. I look at the Daily (D1) chart to define the primary trend and major structural zones. Then I switch to the 4-hour (H4) chart to find precise entry and exit points. The Daily chart helps me ignore small market noise while the H4 chart reveals immediate momentum shifts. Current Market Price The current market price is 156.81. This represents a significant recovery from the January lows. We are seeing the pair climb for the fifth time in the last six trading sessions. Recent Highs and Lows I have tracked the recent price action to define the current range. Recent High: 157.90 (Reached in early February 2026). Recent Low: 152.00 (The major support floor established in January 2026). 52-Week High: 161.95 (The zone where intervention risks peak). Technical Indicator Values Relative Strength Index (RSI): The RSI is currently at 58.5. This means the market is bullish but not yet overbought. There is still room for the price to move higher before reaching the 70 level. Moving Averages: The price is currently trading above the 50-day Exponential Moving Average (EMA) located at 155.40. It is also well above the 200-day EMA at 151.80. As long as the price stays above 155.40, I maintain a bullish bias for the short term. MACD (12, 26, 9): The MACD line has crossed above the signal line. The histogram is turning positive. This confirms that the upward momentum is gaining strength after the January sell-off. Current Candle Pattern I see a series of strong bullish candles on the Daily chart. However, the H4 chart is showing a "Doji" near 156.80. This suggests that buyers are starting to hesitate as we approach the 157.00 psychological barrier. If we see a "Shooting Star" pattern at this level, I will expect a minor pullback. Upcoming Fundamental Economical News I am keeping a very close eye on these high-impact events. Japan Snap Elections: These are scheduled for February 8, 2026. Prime Minister Sanae Takaichi’s fiscal plans are a major focus. If her party wins big, we might see more spending, which could initially weaken the Yen. US CPI Data: This news comes out next week. US inflation is currently around 2.7%. If the data is higher than expected, the Federal Reserve will likely keep interest rates high for longer, pushing USD/JPY toward 160.00. Bank of Japan (BoJ) Summary of Opinions: Recent notes show the BoJ is worried about inflation. Any hint of an early rate hike to 1.0% will cause a massive Yen rally. Support and Resistance Resistance Level 1: 157.70 – 158.10. This is the 61.8% Fibonacci retracement level. It is a very tough ceiling. Resistance Level 2: 160.00. This is the "Intervention Zone." I expect the Japanese Ministry of Finance to step in if the price stays here for long. Support Level 1: 155.40. This aligns with the 50-day EMA and the 38.2% Fibonacci level. Support Level 2: 152.00. This is the "Line in the Sand" for bulls. If this breaks, the long-term trend shifts to bearish. Fibonacci Tools for Entry and Exit I have applied the Fibonacci retracement tool from the high of 161.95 to the low of 152.00. The 38.2% Level: 155.80 (Currently acting as a strong support base). The 50.0% Level: 156.97 (The price is fighting this level right now). The 61.8% Level: 158.15. This is my primary target for the current rally. I call this the "Golden Ratio." It is the most logical place for sellers to return to the market. Trading Strategy Using MA and MACD I use the 50-day EMA to determine the direction and the MACD to time the entry. Buy Strategy: I enter a Long position if the price stays above 155.80 and the MACD histogram is rising. My target is 158.10. Sell Strategy: I look for a Short entry if the price hits 158.15 and the MACD shows a bearish crossover on the H4 chart. This would signal the end of the corrective rally. Sentiment and Correlation I notice a very strong correlation between USD/JPY and the US 10-year Treasury yields. Yields are currently at 4.2%. As long as US yields stay high, the Yen will struggle. However, market sentiment is turning cautious due to the Japanese elections. Many traders are closing their "Carry Trade" positions to avoid weekend volatility. The Context of the Move The context of this move is a "Corrective Bounce." After the crash in January, the market is testing how much the US Dollar can recover. We are not in a runaway bull market anymore. Instead, we are in a wide range between 152 and 160. The current move up is likely a trap for late buyers before the Bank of Japan makes its next hawkish move. Proposed Entry and Exit Entry Point: 157.10 (On a break of the 50% Fibonacci level). Stop Loss: 155.20 (Below the recent swing low and 50-day EMA). Take Profit: 158.10 (Near the 61.8% Fibonacci resistance). Alternative Exit: If the election results on Sunday show a surprise defeat for the ruling party, I will exit all USD positions immediately. Deep Structural Analysis I am diving deeper into the liquidity zones. There is a "Liquidity Void" between 158 and 160. This means if the price breaks 158.15, it could move very fast toward 160. However, the volume profile shows that most trading is happening in the 154 to 156 zone. This suggests that the current price of 156.81 is getting expensive. The real wage growth in Japan is the hidden driver. I see that Japanese companies are finally raising wages by more than 5%. This gives the BoJ the green light to hike rates. On the US side, the economy is resilient but the labor market is showing some cracks. This divergence is the reason why I expect USD/JPY to eventually fall back toward 150.00 by the middle of 2026. I also observe the "Real Interest Rate" gap. While nominal rates are far apart, the real rate gap is narrowing. This is a long-term bearish signal for USD/JPY. I am watching the 200-day EMA at 151.80 as the ultimate magnet for the price. Every bounce like the one we see now is an opportunity to prepare for the next leg down in the global macro cycle. I am using these specific levels to guide my own trading decisions today. The balance between the Feds caution and the BoJs new-found aggression is the theme of the year. I will keep monitoring the H4 MACD for any signs of divergence that might signal an early reversal.