USD/JPY Analysis: Dollar Weakens After Fed DecisionUSD/JPY Analysis: Dollar Weakens After Fed Decision
Yesterday, the Federal Reserve announced its interest rate decision, which, as expected, remained unchanged. Fed Chair Jerome Powell emphasised that there is no rush to cut rates amid uncertainty surrounding US inflation and the tariff policies implemented by the Trump administration.
This key announcement triggered volatility in financial markets, notably:
→ US stock indices rose;
→ the US dollar weakened, which was evident in currency (and cryptocurrency) charts involving USD pairs.
The most significant movement occurred in the USD/JPY chart, as the Bank of Japan was also active yesterday. While it also left interest rates unchanged, it acknowledged growing uncertainty around Japan’s economy and added a new reference to the "changing trade environment."
Technical Analysis of USD/JPY
As we noted on 21 February when analysing the Japanese yen’s exchange rate against the US dollar:
→ Price fluctuations are forming a downward channel (marked in red).
→ The former support at the lower boundary of the blue channel may now act as resistance.
Since then, the price has:
→ Tested the breakout level (indicated by an arrow) before continuing to decline within the channel, confirming its relevance.
→ Reached the lower boundary of the channel and rebounded upwards from the 147 yen per dollar level.
Given that the price is closely interacting with the channel lines and is currently around its median, it suggests that supply and demand are relatively balanced under these conditions. This is further supported by the fact that neither the Fed nor the Bank of Japan introduced surprises, leaving interest rates unchanged.
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USDJPY_LMAX trade ideas
USDJPY -bias long based on confluences bullish indicatios:
Bullish divergenc ein daily time frame
Fib level 0.618 respected.
4 hr: Inverted hs pattern made.
Trend line support broken and respected after retracement.
resistance broken at 148.88
Formation of IHS in 1 hr as well.
trade plan bias long @ 148.782
SL:148.05
TP1:149.50
TP2:150.160
Bearish indications:
LLLH in daily time frame
JPY/USD Breakout from Falling Channel – Bullish Trading SetupOverview of the Chart:
The Japanese Yen (JPY) against the U.S. Dollar (USD) 1-hour chart showcases a well-defined market structure, transitioning from a downtrend within a falling channel to a breakout with bullish momentum. The chart highlights critical support and resistance levels, a confirmed breakout, and a forecasted price movement that could indicate further bullish continuation.
This analysis will break down the chart patterns, technical indicators, and potential trade setups, providing a professional outlook on price action behavior.
Technical Breakdown of the Chart
1. Falling Channel Pattern – Downtrend Phase
The price had been trading within a descending channel, marked by two parallel trendlines (blue lines), indicating a controlled downtrend.
A falling channel is a bullish reversal pattern, as it signals that bearish momentum is weakening.
Within the channel, price action consistently created lower highs and lower lows, adhering to the structure of the pattern.
The red dashed trendline inside the channel acted as a dynamic resistance, rejecting price movements multiple times before the breakout.
📌 Key Observation: The falling channel pattern suggests accumulation, where selling pressure gradually diminishes, paving the way for a bullish reversal.
2. Support Zone & Bullish Breakout
The price eventually reached a strong horizontal support level (highlighted blue zone at the bottom), which acted as a critical demand area.
This support level had previously led to strong rebounds, making it a significant zone for potential reversals.
Bullish breakout confirmation:
A strong bullish candle closed above the upper boundary of the channel, breaking the trendline resistance.
The breakout suggests a shift in market structure from a downtrend to an uptrend, as buyers regained control.
The price has now moved above the previous resistance, confirming the bullish momentum.
📌 Key Takeaway: The breakout is a strong signal that sellers have lost control, and a potential bullish trend could emerge.
3. Resistance Zone – Key Barrier for Buyers
The next area of interest is the resistance level (highlighted in a blue rectangular zone).
This level has historically acted as a strong supply zone, where price previously struggled to break through.
If the price manages to sustain above this level, it would confirm bullish continuation toward higher price targets.
📌 Technical View: If buyers break past this resistance, it could lead to a strong bullish rally, reinforcing the new uptrend.
4. Target Projection & Forecasted Price Movement
The chart outlines a forecasted bullish path using a zigzag projection (black lines). Here’s the expected price action:
Short-Term Movement:
Price might face temporary resistance near the blue resistance zone.
A minor pullback or consolidation in this area is expected before further movement.
Retest of Support:
If price pulls back, it could retest the broken channel resistance or the support zone.
A successful retest and bounce would validate the strength of the breakout.
Bullish Continuation:
If the resistance zone is broken, price is likely to continue toward the target level of 0.006842, a previous swing high.
This level acts as the final upside target based on historical resistance levels.
📌 Key Insight: The market structure suggests that price will follow a higher-high, higher-low pattern, which is characteristic of an uptrend.
Dollar Weakens Post-Fed, Lifting Yen Beyond 148.5The yen strengthened past 148.5 per dollar, rising for a second session as the dollar weakened after the Fed reaffirmed two rate cuts this year. Fed Chair Powell downplayed Trump’s tariffs as short-lived. The BoJ kept rates at 0.5% on Wednesday, adopting a cautious stance amid global risks, especially US tariffs. It also emphasized monitoring forex markets and their impact on the economy.
Key resistance is at 150.30, with further levels at 152.00 and 154.90. Support stands at 147.00, followed by 145.80 and 143.00.
USDJPYKey Levels:
Support Levels:
147.710 – First support zone (potential buy area).
147.230 – Stronger support level where price may react if it continues downward.
Resistance Levels:
149.500 – Key resistance level if the price reverses bullish.
Trade Setup:
A short position is anticipated with entry after a pullback towards a minor FVG.
Take Profit: Near 147.710 or deeper at 147.230.
Stop Loss: Likely above the broken trendline or at a key resistance zone (149.500).
A long position could be considered at 147.710 or 147.230 if price shows bullish signals.
USDJPY SHORT - long term downtrend continuationThe white line on the chart is a path drawn from the daily chart, we have had a nice correction to the green line marked on the chart.
Expecting a retest of the level marked by the red line before a day trade short running down to the previous low created on March 11th.
If it breaks back in to the zone marked by the red and green lines, then I wouldn't take the trade but for now all signs show a continuation of the downward trend.
Fundamental Market Analysis for March 20, 2025 USDJPYThe Japanese yen (JPY) attracted buyers for the second consecutive day and strengthened to a new one-week high against its US counterpart during the Asian session on Thursday. Expectations that strong wage growth could boost consumer spending and contribute to higher inflation give the Bank of Japan (BoJ) room to raise interest rates further. This has led to a recent sharp narrowing of the rate differential between Japan and other countries, which continues to support the low-yielding yen.
In addition, uncertainty over US President Donald Trump's trade policy and its impact on the global economy, as well as geopolitical risks and the political crisis in Turkey, are contributing to inflows into the Yen. The US Dollar (USD), on the other hand, is struggling to gain meaningful momentum amid increased economic uncertainty amid US President Donald Trump's trade tariffs. This, in turn, is weighing on the USD/JPY pair and contributing to the intraday decline.
However, interest rate differentials, the Bank of Japan's loose monetary policy, the trade balance differential and global market sentiment put pressure on the Japanese yen. The further direction of the USD/JPY pair lies on the upside.
Trading recommendation: BUY 148.400, SL 147.600, TP 150.100
Charting the Path Forward: Key Levels to WatchPrevious Analysis: Successful Bullish Breakout
In our previous analysis, we identified a Falling Wedge pattern accompanied by bullish divergence, forecasting a breakout above 147.807. The price hit our target, confirming the bullish momentum and reaching key Fibonacci levels.
What’s Next:
Upon analyzing the chart, we observe that price has found support at 147.535 after a pullback during the American session. We anticipate the price to reach our first target, and after consolidation and a possible pullback, we expect to hit our second target near the upper line of the channel.
However, if the price declines from the first target and breaches support at 147.535, the next key support level is at 146.306.
Remember to follow your risk management strategies to protect your capital.
USDJPY Breakout And Potential RetraceHey Traders, in today's trading session we are monitoring USDJPY for a selling opportunity around 149.300 zone, USDJPY was trading in an uptrend and successfully managed to break it out. Currently is in a correction phase in which it is approaching the retrace area at 149.300 support and resistance area.
Trade safe, Joe.
Order Block @149.84 |Sell SignalPrice is in an overall downtrend but it was in a short-term uptrend. It created a change of character which indicates an end of the short-term trade. No I'll wait for price to retrace and mitigate the order block that lead to the change of character. I'll wait for confirmation in order to enter a sell position.
Buying UsdJpyTrading Strategy:
Entry Point: Consider entering a buy position near the 147.993 support level.
Stop Loss: Place a stop loss just below the 147.740 level to manage risk in case the downtrend continues.
Take Profit: Target the 149.000 or 150.141 levels as potential resistance zones for profit-taking.
Risk Management:
1% of my capital
USDJPY → Resistance retest (wedge) before the Fed meetingFX:USDJPY is forming a correction to trend resistance as part of the dollar index consolidation. An interesting situation is forming which could be a continuation of the downtrend.
Fundamentally, today is an important day. The FED interest rate meeting is ahead. Traders are waiting, the dollar is consolidating at this time. Most likely the rate will remain unchanged, but in this key everyone is interested in Powell's comments on monetary policy and their future actions.
USDJPY at this time is forming a correction to the bearish trend resistance, before the news the currency pair may test the resistance conglomerate: a wedge, 0.79 fibo, or an orderblock located outside the channel
Resistance levels: 150.16, 150.95
Support levels: 148.92
False breakout of the resistance zone can provoke a fall, as well as breakdown of the support of the “wedge” with the subsequent consolidation of the price in the selling zone. The price may test the zone of interest at 147.6, 146.54.
Regards R. Linda!