USDJPY has moved above the 100-bar moving average on the 4-hour chart, currently at 147.84. This is seen as a bullish sign. Last week, the currency pair was mostly stuck between two important moving averages on the 4-hour chart. The 100-bar MA was acting as resistance, while the 200-bar MA provided support. This created a consolidation zone as traders waited for a clear breakout.

The Breakout

As the new week begins, an upward breakout has occurred. The price crossed above the 100-bar MA at 147.84, allowing buyers to gain control. Now, we need to see if this momentum continues, which could lead to testing higher resistance levels. The USD/JPY has surged past 147.84, a key moving average that previously served as resistance. This breakout signals that buyers are now in charge after a period of uncertainty. We will be monitoring whether this upward momentum continues throughout the week. This technical signal is supported by strong fundamental data from the U.S. The recent jobs report for July 2025 revealed an addition of 220,000 jobs, and the latest consumer price index data shows inflation steady at 3.5%. This has sparked speculation that the Federal Reserve may consider another interest rate hike before the year ends. On the other hand, the Bank of Japan is keeping its dovish approach to support a weak economy, highlighted by a slight GDP contraction reported for the second quarter of 2025. This increasing policy gap between a hawkish Fed and a dovish BoJ makes the U.S. dollar more appealing. The growing interest rate difference is a strong factor driving the USD/JPY higher.

Implications for Traders

For traders focused on derivatives, this environment is favorable for strategies that benefit from rising prices. Buying call options with strike prices targeting the 150.00 psychological level could be a smart way to gain exposure to potential growth. The clearer direction makes option buying more attractive than complex trades for now. A similar situation occurred in 2022 when the widening policy gap pushed the pair from the low 130s to over 150. This historical example shows how influential this fundamental driver can be for the currency pair. If current economic conditions persist, the breakout could mark the beginning of a more extended rally. Create your live VT Markets account and start trading now.

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