Brokers from Risance examine the latest USD/JPY technical picture, as the pair extends its decline from the recent high while a key structural support comes under growing pressure.
Sharp Decline From 163.97 Continues
USD/JPY’s fall from the 163.97 high has extended further, marking one of the more notable pullbacks in recent sessions. While additional downside cannot be ruled out, strong support is still expected to emerge around the 38.2% retracement of the rally from 139.87 to 163.97, calculated at 154.76, which could bring at least a first attempt at a rebound.
On the upside, a break above the 157.95 minor resistance would be enough to turn the intraday bias neutral, suggesting the immediate selling pressure has eased. However, should the pair sustain a break of the 154.76 to 155.01 zone, the path would open toward the 61.8% retracement at 149.07, a significantly deeper correction than currently anticipated by most market participants.
The 155.01 Structural Support In Focus
The 155.01 level has emerged as the single most important technical marker for USD/JPY at this stage. As long as this structural support continues to hold, the broader up trend originating from the 139.87 low remains technically valid, with the current move viewed simply as a corrective phase within a larger bullish structure.
A firm defense of this level would keep alive the possibility that USD/JPY resumes its climb toward 163.97 once the ongoing correction runs its course. Momentum traders will be watching closely for signs of stabilization, particularly a bottoming pattern on shorter time frames that would confirm buyers are stepping back in around this zone.
Historically, structural support levels of this nature have played a decisive role in shaping medium term trends for USD/JPY, as similar zones have previously triggered strong buying interest during past corrective phases.
Should price action stabilize near 155.01 with reduced selling volume, this would offer an early technical clue that the broader bullish structure remains preserved despite the recent volatility.
Bigger Picture Hinges On This Level
Zooming out to the broader picture, the stakes attached to the 155.01 support are considerably higher than a typical short term pivot. A firm break below this level would raise the probability that USD/JPY has entered a larger scale correction rather than a routine pullback within an uptrend.
In that scenario, a deeper decline back toward the 139.87 low, which marked the 2025 low, would become a realistic medium term target. This would represent a significant technical shift, effectively erasing much of the recovery built since that low and reopening a broader debate about the pair’s medium term direction.
Momentum Signals Reflect The Sharp Move
The speed of the recent decline is reflected clearly across momentum indicators. The RSI has dropped into oversold territory, a reading that often precedes at least a short term bounce, though it does not by itself confirm a trend reversal. Meanwhile, the MACD has turned sharply negative, mirroring the strength of the recent selling pressure.
Traders should be cautious about reading too much into a single oversold signal, since strong directional moves can keep momentum oscillators pinned at extreme levels for extended periods. Confirmation from price action around the 154.76 to 155.01 zone will likely carry more weight than momentum readings alone in determining the next meaningful move.
Beyond pure technicals, broader macroeconomic dynamics continue to play a meaningful role in shaping USD/JPY direction.
Diverging monetary policy expectations between the Federal Reserve and the Bank of Japan remain a key driver of yen volatility, while shifts in risk appetite across global markets can also amplify moves in either direction. Traders should therefore weigh upcoming economic releases alongside these technical levels when assessing the pair’s next steps.
Conclusion
USD/JPY finds itself at a pivotal juncture following its sharp fall from 163.97. The 154.76 to 155.01 support zone stands as the line separating a routine correction within an ongoing uptrend from the start of a deeper medium term decline toward 139.87.
A recovery above 157.95 would ease near term pressure and shift the bias back to neutral, while sustained weakness below 155.01 would expose the pair to the 149.07 target. Traders active in USD/JPY strategies should treat the coming sessions as decisive, since the reaction around this key support is likely to shape the pair’s trajectory for weeks to come.