Key Highlights
- USD/JPY started a downside correction from the 159.45 zone.
- A major bullish trend line is forming with support at 157.40 on the 4-hour chart.
- EUR/USD extended losses and traded below 1.1640.
- Gold started a consolidation phase below $4,650.
USD/JPY Technical Analysis
The US Dollar rallied above 158.00 and 159.00 against the Japanese Yen. USD/JPY traded as high as 159.45 and started a downside correction.
Looking at the 4-hour chart, the pair declined below 159.00 and 158.80. There was a move below the 23.6% Fib retracement level of the upward move from the 156.11 swing low to the 159.45 high. It even tested 158.20.
The pair is still well above the 200 simple moving average (green, 4-hour) and the 100 simple moving average (red, 4-hour). There is also a major bullish trend line forming with support at 157.40.
Immediate resistance sits near 158.85. The first key hurdle is seen near 159.00. A close above 159.00 could open the doors for a move toward 159.50. Any more gains could set the pace for a steady increase toward 160.00.
If there is no move above 158.85, there could be a bearish reaction. On the downside, immediate support is near the 158.20 level. The first major area for the bulls might be near 157.40, the trend line, and the 61.8% Fib retracement level of the upward move from the 156.11 swing low to the 159.45 high.
A close below 157.40 might spark heavy bearish moves. The next support could be 156.50, below which the bears might aim for a move toward 155.00.
Looking at Gold, the price started to trade in a range below $4,650 and might correct some gains in the near term.
Upcoming Key Economic Events:
- Fed’s Bowman speech.
- US Industrial Production for Dec 2025 (MoM) – Forecast 0.1%, versus 0.2% previous.
