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USD/JPY Breakout Looms—Can Bulls Keep The Rally Alive?

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Aayush Jindal

Key Highlights

  • USD/JPY started a fresh increase from the 156.40 support.
  • A breakout pattern is forming with resistance at 158.40 on the 4-hour chart.
  • EUR/USD struggled to recover and remained below the 1.1250 pivot.
  • Bitcoin corrected some gains and might revisit $80,000.

USD/JPY Technical Analysis

The US Dollar remained supported above 156.40 against the Japanese Yen. USD/JPY formed a base and started a fresh increase above 157.00.

Looking at the 4-hour chart, the pair surpassed the 50% Fib retracement level of the downward move from the 159.03 swing high to the 156.37 low. The pair settled above the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour).

It is now consolidating below the 76.4% Fib retracement. There is also a breakout pattern forming with resistance at 158.40. A close above 158.40 could initiate a steady increase.

The first major resistance might be 159.00. The next key resistance could be near 160.00, above which the pair could aim for a move to 161.20. If there is a fresh downside correction, the pair could find support near the confluence area of the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour) at 157.25.

The first major support might be 156.40. A close below 156.40 might accelerate the decline. In the stated case, the pair might drop to 155.00.

Looking at EUR/USD, the bears remained in action, but they seem to be losing steam and the pair might attempt a recovery wave.

Upcoming Key Economic Events:

  • Michigan Consumer Sentiment Index for Oct 2026 (Prelim) – Forecast 47.6, versus 48.1 previous.
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