Key Moments
- Market-implied probability for a Federal Reserve rate cut in December stands at 92%, intensifying pressure on the USD.
- USDJPY has broken below a key daily uptrend line, with sellers eyeing the 153.50 support zone.
- Traders are pricing in a 36% chance of a Bank of Japan rate hike at the December meeting following comments from Governor Ueda.
Fundamental Overview
The U.S. dollar has been under broad selling pressure after Fed’s Williams backed a December rate cut, triggering a sustained move lower in the greenback. The decline extended last week as softer ADP data combined with a Bloomberg report indicating that Hassett emerged as the frontrunner for the Fed Chair position weighed further on USD sentiment.
Current pricing places the probability of a December cut at 92%, leaving markets treating the move as effectively decided. With limited major data releases scheduled before the upcoming FOMC meeting, attention is likely to remain concentrated on jobless claims and ADP figures, neither of which has been signaling any strong improvement.
Weak incoming data is likely to continue to pressure the dollar, while stronger numbers could offer only short-lived support. Ultimately, the focus is shifting toward the FOMC decision itself and the subsequent Nonfarm Payrolls (NFP) and Consumer Price Index (CPI) prints.
On the Japanese side, the JPY has started to firm after comments from Bank of Japan Governor Ueda, who suggested that a rate hike could still be discussed, even though he did not provide a clear indication that such a move is imminent.
The BoJ remains primarily focused on wage negotiations and is seeking sufficient data ahead of the upcoming meeting to determine whether an earlier-than-expected rate hike is justified or whether more time is needed for assessment. Markets are now assigning a 36% probability to a BoJ rate increase at the December meeting.
USDJPY – Daily Chart Perspective
On the daily timeframe, USDJPY has dropped below its prevailing upward trendline, signaling a shift in momentum and opening the way for a move toward the 153.50 support area. The break prompted fresh selling, with bears now targeting that support zone as their next key level.
From a positioning standpoint, sellers are likely to stay engaged as long as price remains below the broken trendline and the 153.50 region remains in play. Buyers, by contrast, may prefer to wait for a test of the support area before seeking opportunities to position for a potential move back toward new highs, aiming for a more favorable risk-to-reward profile.
USDJPY – 4-Hour Chart Setup
On the 4-hour chart, a minor descending trendline is currently framing the pullback. Sellers are expected to continue using this trendline as a reference point, leaning against it with clearly defined risk levels just above, while pushing price toward the 153.50 support zone.
Bullish participants will likely be looking for a decisive break above this short-term downward trendline as a trigger to enter long positions, targeting a possible rally toward the 160.00 handle if upside momentum strengthens.
USDJPY – 1-Hour Chart Levels
The 1-hour chart shows a nearby resistance level around 155.66, where price has reacted multiple times in recent days. A renewed bounce into this resistance could attract fresh selling interest, with traders placing stops above that area while targeting a decline back toward the broader support region.
On the other hand, a clean break above 155.66 would likely be viewed by buyers as an opportunity to extend the corrective move higher, potentially toward the descending trendline highlighted on the 4-hour chart. The red lines on the chart mark the average daily range for the current session.
Key Technical Levels Overview
| Timeframe | Key Level / Feature | Market Bias |
|---|---|---|
| Daily | Break below major uptrend line; 153.50 support in focus | Sellers targeting support; buyers waiting for a dip |
| 4-hour | Minor downward trendline guiding current pullback | Sellers leaning on trendline; buyers watching for breakout toward 160.00 |
| 1-hour | Resistance near 155.66 with repeated recent reactions | Sellers expected at resistance; buyers seeking break to extend pullback |
Upcoming Data and Event Risks
The macro calendar features several U.S. releases that could influence USDJPY price action.
- Today: US ISM Manufacturing PMI
- Wednesday: US ADP and US ISM Services PMI
- Thursday: Latest US Jobless Claims
- Friday: University of Michigan Consumer Sentiment report
These releases will be monitored closely as the market weighs expectations for the FOMC decision alongside evolving views on a possible BoJ policy shift in December.
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