USD/JPY Technical: Potential impending minor bullish breakout for Japanes...

Earlier last week, the USD/JPY surged to a four-month high of 150.92 on 1 August, but its prior accumulated gains of the previous four sessions were all wiped out and formed a weekly bearish “Shooting Star” at the close of last Friday, 1 August US session.

These observations suggest a potential bullish breakout on the USD/JPY above the key 200-day moving average and the upper boundary of its medium-term ascending range configuration in place from the 22 April 2025 low as it reintegrated back below the 149.50 level.

Since the start of this week, 4 August, through today’s Asian session on 8 August, the Japanese yen has lagged behind other major currencies against the greenback. While the US Dollar Index has fallen 0.5%, the USD/JPY has posted a smaller decline of just 0.2%.

Let’s dissect the latest technical developments in the USD/JPY and construct a possible short-term trading set-up from a technical analysis perspective.

A potential minor bearish breakdown looms on the USD/JPY within a medium-term ascending range configuration in place since the 22 April 2025 swing low of 139.89.

Bearish bias below 148.15 short-term pivotal resistance, and a break below 146.60 may expose the next supports at 145.85 (50-day moving average) in the first step before the medium-term support at 144.50 (lower boundary of the ascending range configuration from 22 April 2025 low).

• From Friday, 1 August, to Tuesday, 5 August, USD/JPY experienced a 430-pip decline (high to low), with price action remaining below its 20-day moving average.
• The USD/JPY has formed a minor “Descending Triangle” bearish range continuation configuration with its downside trigger level at 146.60 below the 20-day moving average.
• The hourly RSI momentum indicator has been capped by a parallel descending resistance at the 56 level, which suggests the lack of upside momentum in USD/JPY.

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Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.

Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.

In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.