The USDJPY pair is leaning upwards, affected by the sluggish progress on the US-Japan trade deal. The USD maintains support since the NFP report exceeded expectations, affecting interest rate predictions. However, USD growth was constrained by softer wage increases.
The JPY suffered from lacklustre wage growth and challenging US-Japan negotiations. The Bank of Japan weighs heavily on trade deal outcomes before adjusting rates. Adverse trade news diminishes hopes of a rate hike by year-end.
Technicals on the Daily Chart
On the daily chart, USDJPY trends towards the 148.28 resistance level. Sellers might intervene at this point to prompt a decline towards the 142.35 support. Buyers seek a breakthrough towards the 151.19 level.
The 4-hour chart shows a bullish trendline. Buyers rely on this momentum to achieve new highs, while sellers await a break below to target the 144.35 range.
The 1-hour chart identifies a resistance zone at 146.50. Sellers aim to break the trendline from this point, while buyers anticipate a move beyond towards 148.28.
Today, new US Jobless Claims data will be released, potentially impacting the market dynamics further.
From what we’ve seen so far, the dollar-yen pair has been trekking higher, a movement underpinned by stronger-than-expected employment data out of the United States. Payroll growth outpaced forecasts, which buoyed expectations regarding borrowing costs. That said, wage figures came in on the softer side, tempering any outsized optimism. The boost to the dollar has therefore come with some restraint — a sort of tentative strength rather than an aggressive push.
At the same time, the Japanese side of this pairing hasn’t brought much to support its own currency. Tepid wage expansion continues to underwhelm, and ongoing trade talks between Washington and Tokyo have struggled to generate forward progress. The central bank remains heavily attuned to any shifts in trade policy, and unfavourable headlines are dampening the likelihood of any raising of rates in the near term. With limited domestic inflationary pressure or momentum, Japan’s yen continues to face headwinds.
Price Action Trends and Market Response
Looking at the technicals, we’ve observed price action edging closer to a firm resistance near 148.28 on the daily timeframe. That’s a zone where sellers may begin stepping in with more conviction, potentially pushing price back as far as 142.35. But if it does punch through, there’s room for upside to extend into the 151.19 region. That range has acted historically as a cap, so a break there would not come quietly.
From a shorter-term lens, the four-hour chart tells a consistent story — upward momentum remains intact. There’s a visible trendline that’s acting as a launchpad for buyers, who will be looking to stretch that run beyond recent ceiling points. For those taking the opposite side, attention remains focused on any breaks below that guiding line, with targets likely hovering around the mid-144 area if momentum shifts.
Zooming into the one-hour chart, the barrier around 146.50 continues to act as the nearer resistance. Some momentum sellers may find reason to act here, especially if the pair stalls repeatedly at this level. If buyer demand stays firm and pushes past it — and especially if any fresh employment data from the US confirms a stable job market — then a move towards 148.28 remains on track. Caution is warranted here though, as any failure to retain momentum above the 146.50 area could trap impulsive entries.
With new weekly claims data due today, we expect one-way price follow-through to be delayed until markets have digested the figures. If filings for unemployment stay subdued, it may be seen as supporting further resilience in the American job market, reinforcing current expectations around interest rates. Should the data show any unexpected rise, that could cast some doubt on those positions, with volatility likely to increase around the release window.
Charts will continue to offer tangible entry and exit points. Reaction at the high-concentration zones nearby will be essential to watch. Often, it’s not the initial reaction, but the follow-through from price after data and technical levels are tested that reveals the true direction.
