The USD/JPY pair saw a small increase during European morning trading, bouncing back from an earlier drop. This decrease happened as tensions eased between Iran and Israel, along with a softer stance from the Federal Reserve’s Bowman. The pair fell from 148.00 to about 144.50 but has now climbed back to 145.60. Currently, the pair is above 145.00 and has passed its 200-hour moving average at 145.15. This rise gives buyers a chance to reach the 100-hour moving average at 145.70. Staying below this level keeps things neutral, while moving above it could signal a bullish trend.

Resistance Levels

Nevertheless, the 38.2% Fibonacci retracement level at 145.85 and other resistance near 146.00 might limit further gains. No significant updates are expected from Powell’s testimony in Congress, shifting attention to US data due tomorrow. The recent increase in USD/JPY appears to be a minor bounce, with little activity in broader markets. The EUR/USD is holding steady at 1.1598, and the dollar is showing little movement elsewhere. Additionally, 10-year Treasury yields are stable at 4.295%, and S&P 500 futures are not showing major changes. The USD/JPY pair’s morning rebound during European trading suggests a slight correction instead of a major shift. Earlier selling pressure, caused by easing geopolitical risks and Bowman’s cautious messaging, led to a sharp price drop. Despite this, support near 144.50 held firm, and the recent rise above the 200-hour average at 145.15 has drawn interest back upward. Technically, this move allows for breathing room toward the 100-hour average at 145.70, though that level hasn’t been broken yet.

Market Activity

We see this price action as consolidation rather than a change in sentiment since the broader market shows little new energy. Powell is unlikely to introduce new information today, providing little reason for markets to reposition ahead of tomorrow’s data release. As the 38.2% retracement level at 145.85 caps movement, we don’t expect a solid advance unless there’s a clear move through this zone toward 146.00. Currently, market flows lack conviction, and short-term momentum is unconvincing. The slight rise in the pair seems driven more by the absence of new sellers than by increased demand. Overall price activity supports this, as other crosses and major pairs remain relatively quiet. The ten-year yield holding steady at 4.295% offers little fresh direction to rate differentials. For those looking at short-term opportunities, the 145.70 and 145.85 levels are important. If these levels are not reclaimed with momentum, positioning could tighten as the week approaches data-driven decisions. We do not anticipate a bullish extension unless sellers reappear higher in the order book. Overall levels are more crucial than headlines in this scenario. Futures for the S&P 500 remain flat, adding to the subdued global risk atmosphere. This quiet backdrop suggests caution. We view the current USD/JPY movement as minor consolidation, with any further action needing stronger inputs rather than mere assumptions. Create your live VT Markets account and start trading now.

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