USDJPY briefly surpassed the 38.2% retracement level of the December–April decline, reaching 147.11, but could not maintain this gain. This failure led sellers to push the pair back into the defined swing band between 145.92 and 146.24.

If USDJPY breaks below this band, it may indicate a bearish tilt. Key levels to watch include 145.47, a minor May pivot, 144.66, the 200-hour moving average, and 144.42, the 100-hour moving average.

Bullish Scenario

Conversely, holding and bouncing from the swing band could suggest a bullish reset. The first hurdle would be to regain the 38.2% retracement level at 147.11, with the key target being 147.49, today’s high price.

The price action within the 145.92-146.24 range will determine the next direction. Watching for momentum on either side of this pivot will be essential to confirm the upcoming trend.

What we’re seeing here is a classic response to a failed breakout attempt. After pushing briefly past the 38.2% retracement of the recent downtrend—specifically the move from December to April—the pair pulled back fairly quickly. This kind of rejection near a retracement level often turns attention back toward short-term levels of balance, and traders acted accordingly by pressing the price into the now-familiar zone between 145.92 and 146.24.

Smith’s earlier push past 147.11 hinted at early bullish intent, possibly driven by expectations of a more hawkish stance from policymakers or improving fundamentals. However, the lack of follow-through tells us that buying conviction was either thin or conditional on a catalyst that failed to surface. Once the push higher faltered, the pull into the existing range invited sellers back in, particularly those who had been waiting to fade any strength near technical resistance.

Bearish Scenario

What matters next is less about noise and more about behaviour around the lower edge of this consolidation. If price dips below 145.92 and holds under it, that’s likely to embolden those looking for deeper retracements within the larger range that’s been developing over recent weeks. The initial targets in that case are clearly defined: first 145.47, which marked a short-term pause during May’s adjustment, then likely pressure towards the moving averages at 144.66 and 144.42. Momentum tends to accelerate near those levels, as shorter-term participants use them as dynamic references for balance and imbalance.

We continue to monitor flow and response rather than just proximity to levels alone. Pressure below the swing band would be more compelling if accompanied by rising volume or if it coincides with a broader shift in cross-asset risk tone. For instance, if equities retreat or yields stay heavy, pricing in more dovish expectations, the pair may have less reason to stabilise near the supports.

That said, a rebound from current levels wouldn’t be particularly surprising either. It wouldn’t be the first time buyers have defended this band with reasonable conviction. If price can stabilise here again, one would expect a move toward retesting 147.11, and ideally beyond that toward 147.49. That’s the high that defines today’s local top, and a breach there would set up an argument for a firmer retracement of the broader decline earlier this year.

In either direction, we’re relying less on guesswork and more on reaction in real terms. Watching how price behaves into and out of this narrow pocket will give us an accurate read on positioning. The next two sessions might begin to answer that more confidently. Static levels only matter if behaviour confirms them.

When looking at ways to position tactically, we stay aware of both the clearly defined swing band and underlying momentum indicators. Moving averages, especially the 100-hour and 200-hour lines, shouldn’t be dismissed—they help indicate when the balance of control has started to tip more decisively one way or the other. We look for extensions beyond them when volatility rises or when major pairs elsewhere begin to widen in movement.

Even if this remains compressed for longer, patience remains a better strategy than guessing at inflection. There’s value in waiting for movement beyond 147.49 or under 145.92 to clear up directional bias. Until then, movement within the band is more likely noise than signal.

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