Fundamental Outlook
US Side – Dollar Remains Supported
The U.S. dollar continues to benefit from relatively attractive interest rates and resilient economic conditions. Although the aggressive buying momentum seen earlier in the year has moderated, the broader environment remains supportive for the greenback.
As long as U.S. economic expectations remain stable, USDJPY is likely to continue attracting buyers on pullbacks rather than sustained sellers.
Japan Side – Yen Stability Limits Volatility
The Japanese yen remains structurally weaker than the U.S. dollar due to ongoing yield differentials. However, recent market behavior suggests that investors are becoming more cautious about chasing USDJPY higher.
This has resulted in a more balanced market, where yen weakness continues to support the pair while periods of risk aversion can still generate temporary pullbacks.

Technical Outlook
Trend Structure
USDJPY remains within a constructive medium-term uptrend.
The sequence of higher lows established during recent weeks indicates that buyers continue to retain control of the broader structure. However, the market remains trapped below a major resistance area, preventing a stronger bullish acceleration.
The current setup favors continuation of the uptrend, but confirmation through a breakout is still required.

Key Support Zones
155.50 – 156.00 represents the primary support zone this week.
Holding above this region would indicate that buyers remain active and continue defending the prevailing structure.
Below that, 154.00 – 154.50 serves as stronger medium-term support.
A sustained break below 154.00 would weaken the bullish outlook and increase the risk of a deeper corrective move.

Key Resistance Zones
The primary resistance zone is located between 158.00 and 159.00.
This area has repeatedly limited upside progress and remains the key challenge for buyers.
A decisive break and sustained acceptance above 159.00 could open the path toward 160.50 – 162.00.

Momentum Conditions
Momentum remains moderately positive.
While buyers continue to defend pullbacks, recent advances have lacked the strength needed to establish a clear breakout. This suggests the market may continue consolidating before deciding its next directional move.
The momentum profile currently favors a gradual upside bias rather than an aggressive trend move.

Trading Scenarios
Scenario 1: Continued Consolidation (High Probability)
The most likely scenario is USDJPY trading between 155.50 and 159.00 while extending its consolidation phase.
In this environment:
• Buyers continue defending support zones.
• Resistance limits immediate upside expansion.
• Price action remains largely range-bound.
This would represent a healthy pause within the broader bullish structure.

Scenario 2: Bullish Breakout (Moderate Probability)
If USDJPY establishes sustained acceptance above 159.00, bullish momentum could strengthen considerably.
Under this scenario, the pair may advance toward 160.50 – 162.00, confirming continuation of the medium-term uptrend.

Scenario 3: Corrective Pullback (Lower Probability)
Failure to hold above 155.50 could trigger renewed selling pressure.
In that case, USDJPY may retreat toward 154.50 – 154.00, signaling a deeper corrective phase within the broader trend.
Such a move would weaken short-term sentiment but would not necessarily reverse the medium-term bullish structure.