FX.co ★ USD/JPY

I am analyzing USDJPY on the H4 timeframe and I see that growth remains the dominant trending movement, which logically suggests that consolidation usually precedes continuation, although I acknowledge that the market can always surprise. I note that the key resistance at this stage is not the most recent local maximum but the 156.95 level, which I tested again today and I clearly interpret this repeated rejection as a corrective signal rather than a breakout attempt. I observe that the current trading range has narrowed significantly between support at 156.25 and resistance at 156.95, and I consider this compression as a sign that volatility is being accumulated. I am currently waiting for another approach or touch of the 156.25 support area, because I believe that the market reaction there will provide valuable confirmation of short-term intentions. I expect that the next trading session will be decisive, as I think tomorrow will reveal the true direction of the breakout from this tightening range. I am also factoring in the macroeconomic backdrop, where I see Nonfarm Payroll forecasts pointing to prerequisites for rising inflation, which I believe will reduce the urgency for the Federal Reserve to cut rates. I interpret this macro setup as supportive for the US dollar, and I therefore see additional fundamental backing for USDJPY strength. I see that the dollar has already resumed its upward momentum, and I connect this directly with the sustained bid structure in our pair. I am watching the price behavior closely, because I consider a renewal of consecutive highs at 157.08, 157.77, and 157.90 as a strong technical indicator of trend continuation. I also note that holding above the mid-range levels without aggressive selling pressure reinforces my bullish bias on the H4 structure. I am cautious, however, because I understand that false breakouts are common near key psychological and technical levels. I prefer to align price action with both technical confirmation and fundamental drivers, and I believe this increases the probability of a successful continuation trade. I remain patient and disciplined, as I know that waiting for confirmation is often more profitable than anticipating moves prematurely.

I continue to observe that the market trends north, even though the pace of growth remains relatively slow and is accompanied by deep and sometimes uncomfortable pullbacks. I note that despite these corrective phases, the price structure remains constructive, as the market continues to update highs, which reinforces my bullish bias. I identify the primary buying target for today at the key reference resistance level of 157.14, and I clearly see that the price approached this level very closely but failed to touch it by a minimal margin. I also recognize that there was an additional upside target at 157.30, and I now view this level as a likely benchmark and focal point for tomorrow’s trading activity. I understand that this resistance zone plays a critical role, because it is directly responsible for activating the breakout structure that has formed on the H4 timeframe. I believe that if the price decisively breaks through this resistance and the breakout activation is confirmed, I can confidently expect continued upward movement toward the next major target at 157.75. I emphasize that such a breakout would validate the broader bullish scenario and confirm that buyers remain firmly in control despite the slow and corrective nature of the trend. I also consider the alternative scenario, where a failure to activate the breakout could trigger a deeper corrective move. I acknowledge that in the absence of a confirmed breakout, the price could easily decline toward the area of today’s daily pivot level at 156.63. I see this pivot zone as a technically important area where liquidity may accumulate and where buyers could attempt to re-enter the market. I expect that from this level, the price may form a base and initiate new attempts to resume the upward movement. I remain cautious in my approach, because I know that slow trends often test traders’ patience and can produce false signals before the real move unfolds. I prefer to monitor price behavior around resistance and support carefully, as I believe that confirmation is more important than anticipation in such conditions. I maintain a flexible bias, staying bullish overall while remaining prepared for temporary pullbacks that could offer better positioning opportunities.