USD/JPY consolidates between 143.5-144.40 as Dollar holds firm: Breakout or bull trap?
- USD/JPY holds firm above 143.50 as dollar strength keeps yen under pressure.
- A clean break above 144.50 is needed to confirm bullish continuation toward new highs.
- FVG between 143.44-143.83 remains key support unless upcoming U.S. data shifts sentiment.
The Japanese yen continues to face pressure as the US dollar holds firm across the board. While USD/JPY hasn’t surged as aggressively as in previous sessions, the pair is consolidating just beneath the 158.00 psychological barrier, with buyers watching for a breakout as U.S. labor data approaches.
The move is largely a function of broader dollar strength, fueled by a resilient labor market and rising U.S. yields, while the Bank of Japan remains firmly in accommodative territory.
Greenback supports Yen weakness
After bouncing from 98.700 and invalidating a key 4-hour Fair Value Gap between 99.112-98.871 level, the U.S. dollar is now pressing into the 99.668 resistance level. If the dollar breaks above this level, USD/JPY could find fuel to push beyond 158.00 and revisit the highs near 144.50 level.
USD/JPY holding a bullish base
The 4-hour Fair Value Gap is still holding the level resting at 143.447-143.836 which is still a bullish outlook for USD/JPY.
However, a rejection on the dollar and failure to hold at the USD/JPY FVG could lead to a correction, offering yen bulls a temporary window, especially if upcoming U.S. data underwhelms.
Overall, bullish structure is still intact for an upside potential. Unless dollar weakens, USD/JPY will still pave way for more upside.
Fundamentals align with bullish bias, for now
The fundamental narrative continues to favor dollar strength:
- U.S. labor market, from JOLTS, showing resilience.
- Rate cut expectations pushed further out.
- BOJ remains cautious on policy tightening.
Unless U.S. data surprises to the downside this week (ADP, ISM, NFP), USD/JPY has room to trend higher.
Dollar awaiting catalyst
- USD/JPY must break 144.50 with momentum to continue higher.
- A pullback to 143.50-143.70 remains healthy unless structure breaks by closing below.
For now, the yen remains on the defensive—but all eyes are on whether this consolidation breaks with volume, or traps late buyers ahead of key U.S. catalysts.
Author
Jasper Osita
ACY Securities
Jasper has been in the markets since 2019 trading currencies, indices and commodities like Gold. His approach in the market is heavily accompanied by technical analysis, trading Smart Money Concepts (SMC) with fundamentals in mind.
