The USDJPY pair is currently moving within a set range, showing weak support for the US dollar. Recent US economic data has been weaker than expected, with lower Consumer Price Index (CPI) and Producer Price Index (PPI) numbers, along with weak jobless claims. This has led to a more cautious outlook on interest rates and a decline in Treasury yields. The Japanese yen remains weak as well. The Bank of Japan is reportedly reducing its bond purchases and has no immediate plans to change interest rates. The central bank is waiting for updates on the US-Japan trade deal and inflation trends. On the daily chart, USDJPY is nearing the 142.35 support level, primarily due to the weak US data. On the 4-hour chart, the price has been stable, fluctuating between important levels. For risk management, it’s best to wait for the price to reach one of these key points. The 1-hour chart shows a drop below the 144.35 level, which has boosted bearish momentum. If the price retests the 144.35 level, sellers can set a defined risk above it, potentially pushing the price down to 142.35. If buyers manage to break above 144.35, they may target 146.28. The University of Michigan’s Consumer Sentiment report will wrap up the week’s economic data. Currently, the market is balancing declining momentum in the dollar against ongoing weakness in the yen. With several inflation reports coming in softer than expected and signs of a weakening labor market, sentiment has shifted towards a more patient approach to US interest rates. Yields have fallen in response, which has removed a key source of USD strength. As a result, the USDJPY pair remains under pressure across various timeframes. Meanwhile, signals from Tokyo indicate a cautious approach rather than decisive action. The Bank of Japan seems hesitant to shake up the markets until it has a clearer understanding of inflation and trade developments. This caution has kept expectations stable following recent bond purchase reductions, explaining the lack of fresh inflows into the yen. Therefore, any decline in the USDJPY pair is mainly due to dollar weakness rather than yen strength. Looking at the charts, we can see decreased volatility. On the daily chart, prices are moving closer to the 142.35 area, a level that previously attracted buying interest. How much the price drops in the short term will depend on reactions to upcoming US consumer data. Notably, recent differences between inflation surveys and actual data may influence trader behavior. The shorter timeframes provide a clearer picture. On the 1-hour chart, there’s been a clear drop below 144.35, leading to growing bearish pressure. Sellers who entered the market earlier may have begun to trail their stops or take partial profits. If there’s a bounce back to the broken 144.35 level and the price stalls, it may present another selling opportunity, especially if trading volume decreases. For those looking for a high-probability trade, it might be wise to remain patient until volatility increases. The 4-hour structure still keeps movement within defined limits, and entering near these edges usually offers better risk management. These boundaries help make decisions without guessing where the price may “break out.” Traders should also keep an eye on sentiment indicators, like the Michigan survey, as they could shift expectations. While this survey usually doesn’t cause big market moves, any significant changes in consumer sentiment and inflation could impact future interest rate paths. While the long-term trend is still cautiously upward, daily and intraday patterns suggest lower levels are being tested consistently. A move below previous support won’t trigger a strong reversal, but combined with weaker macro drivers, a downward shift remains possible. Until there’s a daily close above resistance, the anticipated path seems to lean towards gradual declines.

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