USD/JPY rose on Monday after weak Japan Q4 GDP data pushed the yen lower. A small lift in the US dollar and a better risk mood also helped the pair bounce from an over two-week low set last Thursday.
The pair stayed above the rising 200-day exponential moving average (152.54). It also rebounded near the 38.2% Fibonacci retracement of the April 2025 to January 2026 move, at 152.11.
Technical Levels Keep Bias Cautious
Different policy outlooks between the Bank of Japan and the US Federal Reserve capped further gains. A mixed technical setup also argues for caution.
The MACD line remained below the signal line. Both stayed below zero, and the bearish histogram grew. The RSI was 38, under the midline, pointing to weak upside momentum.
Resistance sits near the 23.6% retracement at 154.96. A daily close below 152.11 could open the door to a deeper pullback. A break above 154.96 could support more gains.
Japan’s economy unexpectedly shrank by 0.4% in the final quarter of 2025. That helps explain why USD/JPY rebounded from below 152.50. Weak growth tends to hurt the yen because it reduces the chance that the Bank of Japan will tighten policy soon. We see this as the main reason the pair held firm at the start of the week.
This differs from the United States. January 2026 inflation came in at 3.2%, a bit higher than expected. Sticky inflation keeps pressure on the Federal Reserve to hold rates where they are, which supports the US dollar. This policy gap is limiting upside in the pair and keeping a lid on the recent rebound.
Options Strategies For A Range
For derivatives traders, this back-and-forth can favor range-bound strategies. With support near 152.11 and resistance near 154.96, selling an iron condor with strikes outside this area could be one way to collect premium. This works best if the pair stays between these levels in the weeks ahead.
We are also watching the 200-day moving average near 152.54, which has acted as support during the pullback from the January 2026 highs. Selling put options around the 152.00 strike could offer bullish exposure while generating income. This is profitable if the pair holds above this key long-term support zone.
However, bearish signals like the MACD suggest sellers are still active. A clean break below 152.11 could speed up the drop, which may make long puts appealing for downside exposure. A sustained move above 154.96 would instead suggest the uptrend seen through most of 2025 is returning, which would favor bullish approaches like buying calls.
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