USD/JPY Price Analysis: Bearish trend reversal extends

USD/JPY is extending its downmove as it continues selling-off.
Both the short and medium-term trends are now probably bearish.
The pair now targets the October 2021 high in the 151s.

Joaquin Monfort FXStreet

USD/JPY is trading over 1.0% lower on Wednesday as it extends its bearish trend reversal after peaking at the July 10 highs and then rolling over.

After the recent bout of weakness, it could now be argued that both the short and probably medium-term trends have turned bearish. Given the old adage that “the trend is your friend” the odds favor a continuation lower over those time frames.

USD/JPY Daily Chart

USD/JPY has reached its conservative downside target at 154.90, which is the 61.8% Fibonacci extension of the down move prior to the major trendline break, extrapolated lower. It has also now almost reached 153.21, the 100% extrapolation of the same.

It is possible prices could continue falling to the next obvious target at 151.84 and a key support level (October 2021 high).

The Relative Strength Index (RSI) is just about in oversold territory on an intraday basis. If the day ends with the RSI below 30 and, therefore, oversold there will be an increased risk of a pullback or consolidation developing and delaying the pair’s continued sell-off.

The long-term trend remains bullish with a break below 151.84 required to bring that into doubt.

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD holds gains above 1.1400 on hawkish ECB expectations despite US-Iran tensions

The EUR/USD pair trades with mild gains around 1.1405 during the early Asian session on Wednesday. A hawkish tone from the European Central Bank provides some support to the Euro against the US Dollar. Traders await the upcoming ECB interest rate decision on Thursday.

Gold hits one-week high, near $4,100 as bulls shrug off Fed hike bets and firmer USD

Gold advances to an over one-week high during the Asian session on Wednesday, with bulls now awaiting a move beyond $4,100 before positioning for additional gains. However, concerns about energy-driven inflation risks continue to fuel Fed rate-hike bets and act as a tailwind for the US Dollar amid escalating US-Iran tensions, which, in turn, could cap the bullion.

XRP rebounds on rising on-chain activity

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.