Key Highlights
- USD/JPY started a fresh increase above the 156.50 zone.
- A bullish flag seems to be forming with resistance at 156.80 on the 4-hour chart.
- EUR/USD is consolidating gains above 1.1720.
- GBP/USD could aim for a fresh increase if it clears 1.3520.
USD/JPY Technical Analysis
The US Dollar started a fresh increase above 156.20 against the Japanese Yen. USD/JPY cleared the 156.50 resistance to enter a positive zone.
Looking at the 4-hour chart, the pair settled above the 156.50 level, the 200 simple moving average (green, 4-hour), and the 100 simple moving average (red, 4-hour). A high was formed at 156.99 and the pair is now consolidating gains.
There was a minor decline below 156.70, and the 23.6% Fib retracement level of the upward move from the 155.74 swing low to the 156.99 high. However, there is a bullish flag seems to be forming with resistance at 156.80.
On the downside, there is key support at 156.35 and the 50% Fib retracement. It is also close to the 100-SMA. A downside break below the 100-SMA might spark bearish moves. The next major support could be 156.00, below which the pair might dive and test 155.50.
Immediate resistance sits near 156.70. The first key hurdle is seen near 157.00. A close above 157.00 could open the doors for a move toward 157.50. Any more gains could set the pace for a steady increase toward 158.00.
Looking at EUR/USD, the pair is consolidating gains and could aim for another increase if it manages to clear the 1.1800 resistance.
Upcoming Key Economic Events:
- Euro Zone Manufacturing PMI for Dec 2025 – Forecast 49.2, versus 49.2 previous.
- US Manufacturing PMI for Dec 2025 – Forecast 51.8, versus 51.8 previous.
