The USDJPY recently broke out bullishly, going above the 200-day moving average and the 50% midpoint of the 2025 trading range. However, last week, a disappointing U.S. jobs report reversed this trend, causing a sharp drop in the pair’s value. On the 4-hour chart, USDJPY fell below the 100-bar moving average at 148.00, signaling a shift to bearish sentiment among traders. The hourly chart confirms this, showing sellers holding the upper hand below the 200-hour moving average at 148.15.

Immediate Support Levels

Immediate support is at the 200-bar moving average on the 4-hour chart, currently at 146.566. If the price falls below the session low of 146.90, the bearish momentum could increase, with targets between 145.91 and 146.288. Key support also lies at the 100-day moving average at 145.698. The ongoing failures to break resistance and the layered support levels are essential for tracking market momentum. Traders should keep an eye on these technical indicators for future market movements. As of August 4, 2025, the technical outlook for USD/JPY shows that sellers are firmly in control. The attempted rally last week was derailed by the weak U.S. jobs report, pushing prices below crucial moving averages. This failed breakout indicates that the path forward is likely downward. Last Friday’s U.S. jobs data is behind this shift. The economy added only 110,000 jobs in July, significantly below the anticipated 180,000, and the unemployment rate rose to 4.0%. This underperformance dampens expectations for further rate hikes from the Federal Reserve this year, weighing heavily on the U.S. dollar.

Yen Sentiment and Strategy

Meanwhile, sentiment around the yen is growing stronger. Bank of Japan officials are talking more about reviewing their policy, with many now expecting another small rate hike before 2025 ends. This difference in central bank views supports a continued decline in USD/JPY. For traders using derivatives, buying put options is an appealing strategy. With prices below 147.00, traders might consider puts with strike prices near the next support levels, like 146.50 or 146.00. This allows them to capitalize on further downturns while controlling risk to the cost of the option. To manage costs, traders could explore a bear put spread—buying a put option and simultaneously selling a lower-strike put. Given the recent rise in implied volatility after the jobs report surprise, selling the lower-strike put can help finance the position. This strategy targets a measured decline towards the 100-day moving average around 145.70. We must keep in mind the sharp interventions by Japanese authorities in 2022 and 2024 when USDJPY was above 155. Although we are not at those levels now, that history may deter aggressive rallies, giving traders more confidence to maintain short positions. The likelihood of intervention from the Ministry of Finance seems low, removing a significant obstacle for yen strength. Key levels to monitor are the moving averages at 148.00 and 148.15. As long as the price stays below this resistance zone, the bearish outlook remains intact, and selling on minor rallies is the preferred strategy. If the price consistently moves above 148.15, it would suggest that the downward momentum is fading, requiring a reevaluation of short positions. Create your live VT Markets account and start trading now.

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