The USDJPY pair went up after the US Non-Farm Payroll (NFP) report came in better than expected, leading to a temporary rise in interest rate expectations. However, weaker wage growth suggested that only two rate cuts might happen by the end of the year. This reduced support for the USD and erased some of its earlier gains. The JPY’s fundamentals remain unchanged, mainly swayed by risk sentiment. The Bank of Japan (BoJ) kept interest rates at 0.5% and adjusted its bond tapering plan for fiscal 2026 as expected. They are focusing on the US-Japan trade deal and inflation changes before making any rate decisions.

Technical Analysis of USDJPY

On the daily chart, USDJPY is between a support level at 142.35 and a resistance level at 146.00, showing no clear direction. The 4-hour chart indicates that prices went above the key level of 144.25 following the NFP report, with the potential to reach the 146.28 resistance. Buyers are trying to maintain their position above this area, while sellers are aiming for a drop to the 142.35 support. The 1-hour chart reveals a slight upward trend supporting bullish momentum. Buyers are working to keep prices rising and possibly reaching new highs, while sellers are looking to break lower to reinforce bearish trends toward the 142.35 level. The red lines highlight today’s average daily range. Recently, the initial spike in USDJPY after the NFP report has faded. This is mainly because the increase in job creation didn’t match significant wage inflation, making a strong USD less likely. Although the dollar initially rose after the positive US employment report, expectations for major policy changes were quickly tempered by softer earnings data. Now, it seems only two rate cuts are expected for the rest of the year. With Japan’s interest rates remaining stable and the BoJ making only slight changes to its long-term bond reduction plans, the focus has shifted. Tokyo’s monetary policy is predictable for now. Daily price movements are now more influenced by global equity market swings and overall investor confidence than by domestic factors. Sharp shifts in global sentiment are still important to watch.

Trading Strategies and Market Insight

Currently, price activity is focusing on holding above the level of 144.25, supported by active short-term trendlines. The movement hasn’t been very strong, indicating that traders are consolidating before making the next move. Volatility around the 144.80–145.50 area could present short-term opportunities, as prices try to test the weekly high again. Prices stuck between the clear resistance at 146.00 and support at 142.35 suggest that buyers might push higher gradually, or there could be a sharp correction if this upward trend fails. Without confirmation, significant trade opportunities above these levels are limited. Tracking momentum on smaller timeframes is beneficial since they provide clearer insights than the broader daily chart, which is still lacking clear directional signals. The lower timeframes show immediate changes in sentiment and have seen small buying spikes, although these haven’t had consistent follow-through. If prices drop below 144.25, it could tempt profit-taking from recent long positions. Falling below the hourly trendline may push the pair to test the lower boundary near 143.50. Further declines could lead to a move toward 142.35, especially if macro headlines impact risk-taking. As we move forward, it is better to stay focused on reaction levels rather than predict breakout directions for better trade setups. Watching for sessions where trading volume increases near key levels can indicate more sustainable movements. The best edge comes from aligning price structure with momentum and sentiment. Create your live VT Markets account and start trading now.

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