USD/JPY just turned lower from a key resistance zone!

Will this drag the pair to lower inflection points ahead of this week’s potential catalysts?

Here’s what we’re seeing on the 4-hour time frame:

USD/JPY: 4-hour

USD/JPY 4-hour Forex

USD/JPY 4-hour Forex Chart Faster With TradingView

The dollar heads into a pivotal week with the FOMC decision and what could be Jerome Powell’s final press conference, where any dovish tilt or nod to softer growth could weigh on the Greenback even as a hot core PCE print remains the main upside risk.

Meanwhile, the yen’s case for strength continues to build as the Bank of Japan moves closer to policy normalization, supported by sustained wage growth and firm Tokyo core CPI that keep a June hike in play.

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

USD/JPY is still hovering near 160, so intervention risk isn’t going anywhere. But after turning lower from the 159.80 range resistance, the pair looks like it could drift toward lower inflection points ahead of this week’s major catalysts.

We’re watching the 159.25 area for potential buying interest. That lines up with the Pivot Point at 159.23 and the 100 and 200 SMAs. If that area breaks, USD/JPY could drift toward the 158.80 mid-range zone, with a deeper move opening the door to the 158.00 psychological level near the S2 at 157.94.

If buyers step in at those levels, the pair may take another run at 159.80 and possibly the 160.00 handle.

But if this week’s catalysts push USD/JPY cleanly above 160.00, then resistance around 160.50 and the R2 at 160.53 could come into play as the next upside barriers.

Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.

Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.

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