Fundamental Outlook
US Side – Dollar Retains Fundamental Support
The U.S. dollar continues to draw support from relatively attractive interest rates and a resilient economic backdrop.
While the pace of dollar appreciation has slowed compared to earlier phases of the year, the underlying environment remains supportive. As a result, significant USD weakness remains difficult to sustain unless market expectations shift materially.
This backdrop continues to provide a supportive foundation for USDJPY on pullbacks.
Japan Side – Yen Stabilization Limits Upside Momentum
The Japanese yen remains structurally weaker than many major currencies due to persistent policy and yield differentials.
However, market participants have become increasingly cautious about aggressively selling the yen at elevated USDJPY levels. This has limited upside momentum and contributed to the development of a broad trading range over recent weeks.
The result is a market that remains constructive but lacks the momentum required for a sustained rally.

Technical Outlook
Trend Structure
USDJPY remains in a medium-term bullish structure despite recent consolidation.
The pair continues to hold above key support levels and maintains a sequence of higher lows on broader timeframes. However, the lack of follow-through buying above recent highs suggests that the market is waiting for a catalyst before committing to a larger directional move.
For now, consolidation remains the dominant theme.

Key Support Zones
155.00 – 155.50 represents the primary support zone this week.
As long as price remains above this region, buyers are likely to maintain control of the medium-term structure.
Below that, 153.50 – 154.00 serves as stronger support.
A sustained break below 153.50 would weaken the bullish outlook and increase the probability of a broader corrective phase.

Key Resistance Zones
The primary resistance zone is located between 157.50 and 158.50.
This area has capped several recent upside attempts and remains the key technical hurdle for buyers.
A decisive break and sustained acceptance above 158.50 could open the path toward 160.00 – 161.00.

Momentum Conditions
Momentum indicators remain broadly neutral with a slight bullish bias.
Buyers continue to defend pullbacks, but the inability to generate strong upside acceleration suggests that momentum remains moderate rather than strong.
This favors continued range trading unless resistance is successfully broken.

Trading Scenarios
Scenario 1: Range Consolidation Continues (High Probability)
The most likely scenario is USDJPY trading between 155.00 and 158.50 while extending its consolidation phase.
In this environment:
• Support continues attracting buyers.
• Resistance limits upside expansion.
• Price action remains largely range-bound.
This would be consistent with a market preparing for a larger move later in the quarter.

Scenario 2: Bullish Breakout (Moderate Probability)
If USDJPY establishes sustained acceptance above 158.50, bullish momentum could strengthen significantly.
Under this scenario, the pair may advance toward 160.00 – 161.00, confirming continuation of the broader bullish trend.

Scenario 3: Corrective Decline (Lower Probability)
Failure to hold above 155.00 could trigger a deeper pullback.
In that case, USDJPY may retreat toward 154.00 – 153.50, indicating that sellers are gaining short-term control.
Such a move would likely be viewed as a correction rather than a reversal of the broader trend.