FX.co ★ absh kaat | USD/JPY

I am analyzing the USDJPY currency pair on the daily timeframe, and I clearly see that the year 2025 has ended with the long-term bullish wave structure still actively developing upward. I note that I am observing confirmation from the MACD indicator, as I see it positioned firmly in the upper buy zone and remaining above its signal line, which reinforces my bullish bias. I recall that during December there were two distinct attempts to deepen the correction, yet I observe that price repeatedly respected the horizontal support around 154.37 and failed to break below it. I interpret this inability to break support as a clear sign of strong underlying demand, and I see that a double-bottom growth formation developed within the broader bullish trend. I believe that this structure reflects sufficient seller accumulation being absorbed by stronger buyers, allowing price to rotate higher. I am convinced that the market is now striving to renew the high of 2024 near the 162.14 area, even though I understand that this level is not visible on the daily chart and must be confirmed on the weekly timeframe. I expect that price will first break above the high formed at the beginning of 2025 in January, as I see this as a necessary intermediate objective. I anticipate that after this breakout, I will likely observe a temporary pause or pullback, as I expect bearish divergence to begin forming on momentum indicators. I think that during this pause, the market will deliberately attract and trap new sellers who react to divergence signals. I expect that once this liquidity is gathered, price will push beyond the 2024 high before any meaningful reversal occurs. I believe that only after this final expansion can I reasonably expect a daily trend reversal and a deeper corrective phase. I therefore conclude that until the ultimate upside target is reached, I should focus exclusively on shorter-term buy opportunities. I also believe that the dollar is likely to remain strong against most major currencies in the near term. I observe that USDJPY has outperformed significantly in recent months with minimal pullbacks, and I attribute this partly to Japan’s tolerance for a weaker yen. I find it notable that even recent Federal Reserve rate cuts have failed to weaken the dollar meaningfully. I consider the 2024 high not only a yearly high but also an all-time high visible in trading terminals, and I firmly believe it is likely to be broken soon.

I am looking at the USDJPY on the hourly timeframe, and I am increasingly convinced that the bearish side is currently struggling to find any meaningful justification for entering the market at these levels. I feel that I do not yet see conditions that would support a confident bearish position, especially given how price is behaving near key resistance. I am closely monitoring the 158.20 level, which I identify as the upper boundary of the 5/8 channel, and I clearly see that this resistance is being actively pressured by buyers. I interpret this persistent pressure as a sign that US dollar bulls remain in control and are likely preparing for a breakout attempt. I believe that a decisive hourly candle close above 158.20 will serve as clear confirmation that buyers have won this battle. I expect that if this confirmation occurs, I will see price continue its upward movement toward the next resistance zone around 158.59, which I recognize as the 6/8 rotation reversal level. I am aware that this area may initially slow the advance, but I do not currently see strong technical arguments for a sustained reversal from there. I also recognize that the broader intraday structure remains bullish, and I see no clear distribution pattern forming at the highs yet. I am therefore inclined to treat any minor pullbacks as corrective rather than the start of a larger decline. From the bearish perspective, I clearly understand that sellers must regain control by forcing price back below the 157.81 support level. I believe that only a sustained return below this level would create a realistic opportunity for a downward reversal scenario. I also think that without such a breakdown, any short positions remain vulnerable to being trapped by renewed buying pressure. I am observing that momentum remains tilted upward, and I see no convincing divergence that would suggest immediate exhaustion. I am therefore maintaining the view that the path of least resistance is still higher. I conclude that until the market proves otherwise by breaking key support, I should continue to respect the bullish intraday bias.