The USD/JPY has continued to decline amid tariff threats, increasing demand for safe haven assets like JPY, CHF, and Gold. The currency pair is presently around 142.85, with risks primarily leaning towards further downwards movement.

Key technical indicators highlight support levels for USD/JPY at 142, 141.60, and 139.90. Resistance levels are noted at 144.40/60 and 145.70, which are influenced by the 21 DMA and 50 DMA, respectively.

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With USD/JPY trading lower due to growing tariff-related worries, we’ve noted continued pressure on the dollar as investors look for safety. Markets have clearly shifted into a risk-off stance—there’s a layer of caution in most major asset classes right now. The yen, along with traditional fallbacks like the Swiss franc and precious metals, is seeing higher inflows. We’ve seen this pattern before: when global trade tensions escalate, market participants tend to prioritise capital preservation and move towards less volatile assets.

Technical Analysis and Market Sentiment

What’s more revealing is the technical setup supporting this move. The pair is hovering near 142.85, already brushing close to previously identified support at 142. If that level breaks decisively—and price action over recent sessions suggests lower conviction in dollar strength—we could be heading first towards 141.60, and eventually perhaps see a test in the 139.90 area. Those zones have previously acted as turning points during periods of yen buying, so they’ll be watched closely in the coming trading sessions.

We can’t ignore the resistance levels above either. The 21-day moving average appears to be acting as resistance near 144.40–144.60, followed by the 50-day near 145.70. These moving averages are often referenced in medium-term positioning, so reactions near those points could trigger technical buying or selling. At the moment, however, there’s less momentum driving USD/JPY upwards. This suggests bears may have more control unless external catalysts shift direction.

From our perspective, timing matters now more than ever. Momentum strategies should be reassessed in light of lingering geopolitical triggers. With volatility back on the rise, especially across currency pairs involving the yen, we believe risk management needs extra attention. For those actively involved in short-term trades, levels should be monitored tighter than usual.

This sentiment isn’t happening in isolation. Global markets have shown early signs of correlation stress—we’ve seen it in sharp intraday swings between FX pairs and commodities, with gold often moving inversely to yield expectations and risk appetite. With the yen acting as a mirror to this unease, its recent strength is not simply technical, but also sentiment-driven.

It’s appropriate to reevaluate any assumptions about stability in USD-denominated crosses. Liquidity remains thin during off-peak hours, which could result in sharper moves than usual. Range trading strategies may underperform if those support levels break, especially if USD continues to weaken across other majors.

Having clear execution plans—particularly stop placements that factor in volatility buffers—might help reduce surprises in this sort of setup. If price drifts lower in a slow grind rather than dramatic selloffs, we might also see temporary pullbacks misinterpreted as reversals. Being patient and disciplined in such moments has proven to work in our experience, especially when market sentiment is one-sided for extended periods.

It’s also worth mentioning that data releases scheduled over the next fortnight may bring abrupt changes, so any open positions ahead of those events should carry a calculated degree of risk. We prefer not to lean too heavily on short-term expectations, but rather adjust positioning ahead of likely catalysts based on confirmed price behaviour.

As always, all of this indicates recognition—not certainty. It’s not enough to identify support and resistance and assume they’ll hold. We continue to observe how price interacts with those zones rather than rely on fixed forecasts. Confirmation matters more than presumption in environments driven by macro concerns.

We stay focused, apply the framework that’s worked before, and avoid overcommitting one way or the other when clarity hasn’t been reached.

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