FX.co ★ USD/JPY

The USD/JPY pair declined for the second consecutive day during the Asian trading session, fluctuating around the 157.10 level, as market participants assessed various technical patterns and official macroeconomic warnings. The current price action is consolidating within a symmetrical triangle pattern, indicating a sideways market with a temporary balance between buyers and sellers. This structural consolidation strongly suggests impending volatility, which could increase once the price breaks through recent resistance levels or falls below established support levels. Technically, the pair remains slightly bearish in the short term, continuing to trade below the 9- and 50-period exponential moving averages (EMAs). The spot price is consolidating below these key short- and medium-term moving averages, meaning any future upward attempts will likely encounter strong resistance. However, the 14-period Relative Strength Index (RSI) is hovering near the neutral threshold of 49, suggesting further consolidation rather than a radical trend reversal. Looking at the upside, immediate resistance lies at the 9-day moving average around 157.22, followed by resistance at the 50-day moving average around 157.98. The main overhead resistance is at the descending upper boundary of the symmetrical triangle pattern around 158.80. If the pair manages to break out of the multi-week-long triangle pattern with significant trading volume, it will trigger a strong rally, paving the way for further gains and potentially testing its nearly 40-year high of 163.99 (reached on July 23). Conversely, the pair faces downside risk, potentially falling to the ascending lower boundary of the symmetrical triangle around 155.60. A break below this key support level would increase bearish momentum and could test its 11-month cyclical low around 152.10. Furthermore, the increasingly strident rhetoric from Japanese authorities has heightened market concerns about potential currency intervention, further complicating the technical picture. Market analysts at MUFG Financial Group confirmed that recent statements from Tokyo policymakers highlight their growing resolve. They noted that recent official statements clearly indicate Japan's readiness to intervene in the foreign exchange market at any time to defend and support the yen. Financial experts believe that the remarkable consistency and strength of these official statements reflect the Japanese government's willingness to take concrete action should the yen depreciate excessively again.