USD/JPY traded around 142.40 during the Asian session, indicating a bearish trend by moving downward within a descending channel. The pair remains below the nine-day Exponential Moving Average (EMA), suggesting weak short-term momentum.
The 14-day Relative Strength Index (RSI) is hovering just above 30, hinting at the possibility of an oversold condition which might cause a rebound. If the pair approaches the seven-month low of 141.61, recorded previously, and breaks the lower boundary near 140.80, it could move towards 139.58.
Resistance Levels
On the upside, resistance is seen at the nine-day EMA around 143.80. Breaking this level might enhance short-term momentum and lead to a test of 146.30, which is the channel’s upper boundary.
Longer-term resistance points include the 50-day EMA at 148.30 and the two-month high of 151.31. The Japanese Yen weakened against the Swiss Franc, with a status quo against most other major currencies today. The heat map indicates percentage changes between currencies, with the base picked from the left and the quote from the top.
The recent activity in USD/JPY shows a downward channel taking firm shape, with current price action confined below a declining nine-day EMA. That tells us we’re in the midst of weaker momentum, at least in the short term. Price slipping inside a descending pattern usually signals a lack of buying interest. And given how it’s behaving around 142.40, the undertone remains firmly tilted to the downside unless price action drastically changes.
Meanwhile, the 14-day RSI inching above 30 paints a slightly different picture—one worth pausing over. While it’s not screaming for a reversal, it does suggest that we may be approaching exhaustion on the sell side. Oversold conditions don’t guarantee a bounce, but historically, those levels near 30 often precede short-lived recoveries. Nonetheless, it only becomes a meaningful shift if price starts reclaiming levels above the EMA.
Key Support And Potential Movements
What’s sitting just below—141.61, that key support from seven months ago—is only a stone’s throw away. If pressure pushes the pair below 140.80, which outlines the lower limit of the current downward channel, we could see a quick slide towards 139.58. There isn’t much standing in the way of that move once that boundary breaks. Support zones tend to lose their footing faster when approached amid declining momentum and consistent lower highs.
On the other hand, if buyers find reason to re-enter and challenge 143.80, where the nine-day EMA flatlines, the tone shifts. We then face the possibility of a retracement toward 146.30, the next visible technical hurdle at the upper perimeter of that same descending channel. But that move would require building back momentum—something we haven’t seen confirmed yet.
Targets beyond that include 148.30, near the 50-day EMA, and 151.31, which was marked two months back as the high. Those levels won’t come into play without a strong shift in direction and broader conviction from buyers, which isn’t appearing just yet.
Meanwhile, we’ve been watching the yen’s performance elsewhere. It lost further ground against the Swiss Franc—a sign that weakness isn’t isolated to one pairing. Across other currency pairs, the yen remains steady, which points to selective selling rather than broad-based positioning shifts.
From a derivatives standpoint, directional risk looks skewed lower for now. Put skews could widen if spot breaks through lower support areas. Theta decay could also be more tolerable on the downside plays while the trend persists. Medium-term call spreads haven’t been delivering much, with the current implied volatility structure not offering favoured payoffs. Still, watch the RSI. If there’s a price bounce shaping up, we might see a mild repricing in short-dated vol instruments.
As we assess the heat map, relative performance across currencies remains mixed. But for USD/JPY specifically, the path of least resistance is clear for now.
