2026-01-22 04:43:00
Trend-trading traders huddle up!
USD/JPY just bounced from a key trend support zone.
Think the pair will extend its weeks-long uptrend in the next trading sessions?
The U.S. dollar is clawing back some early losses after U.S. President Trump stepped back from additional tariffs on European goods, easing U.S.-EU trade war fears.
The Japanese yen is not seeing the same bounce, as traders stay cautious ahead of this week’s Bank of Japan policy update and an upcoming parliamentary snap election.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the U.S. dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
USD/JPY, which has been making higher highs and higher lows since October, recently turned lower from the 159.50 area before finding willing buyers near 157.75, a zone that lines up with prior resistance turned support.
That level stands out even more as it also aligns with the 100 SMA, the 50% Fibonacci retracement of January’s upswing, and a trend line that has been in place since mid-December.
Green candlesticks and continued trading above 158.50 could reopen the door for a move back toward the 159.40 prior highs, if not fresh 2026 highs.
On the flip side, another dip below the 158.00 area could attract bearish pressure and kick off a deeper pullback. A break below trend line support would put the 157.00 and possibly the 156.00 zones back on the radar as potential inflection points.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
If you’re SERIOUS about your growth, trade journaling is the best way to track, measure and manage your performance AND psychology! Check out TradeZella, the #1 AI-powered journal and backtester to help you trade like a pro. BabyPips Premium Annual Members get an exclusive 30% discount on the annual TradeZella subscription for the first year ($120 in savings)! Click here for more info!
