Key Moments
- USD/JPY extended gains for a fifth straight session on Friday, trading near 158.60 in early European hours.
- The US Dollar Index climbed 0.25% to around 99.10, marking its highest level in more than two weeks.
- USD/JPY remained above its 20-period EMA and the 61.8% Fibonacci retracement at 158.57, maintaining a short-term bullish bias.
Fundamental Drivers Supporting USD/JPY
The USD/JPY pair continued its upward trajectory for the fifth consecutive trading day on Friday, edging 0.11% higher to trade close to 158.60 during the early European session. The move has been underpinned by broad-based strength in the US Dollar, supported by signs of improving trade dynamics between the United States and China and solid expectations that the Federal Reserve will keep interest rates unchanged through the year.
At press time, the US Dollar Index (DXY) – which measures the Greenback against a basket of six major currencies – was up 0.25% near 99.10, its highest level in more than two weeks.
Earlier in the day, US President Donald Trump said that he had struck “fantastic trade deals” with Chinese President Xi Jinping as he wrapped up his Beijing visit on Friday, Reuters reports.
After the Trump-Xi meeting, a White House official also said, “Two sides discussed expanding market access for American businesses into China and increasing Chinese investment.”
In parallel, market participants have largely removed expectations for any Federal Reserve rate cuts this year. This shift has been driven by intensifying inflation pressures tied to higher energy prices, which has reinforced the perception of a prolonged period of restrictive US monetary policy.
USD/JPY Technical Overview
On the four-hour chart, USD/JPY was trading around 158.57. The pair remained above the 20-period exponential moving average (EMA) at 157.87 and sat directly on the 61.8% Fibonacci retracement level at 158.57. This configuration has kept the near-term outlook constructive while that key pivot level continues to hold.
The Relative Strength Index (14) stood at 77, signaling overbought conditions and indicating that bullish momentum has become stretched, even as price action continues to be supported by the prevailing upward trend structure.
Key Technical Levels
| Level Type | Price | Comment |
|---|---|---|
| Current price area | 158.57 | Trades at 61.8% Fibonacci retracement |
| 20-period EMA | 157.87 | Near-term dynamic support |
| Resistance 1 | 159.52 | 78.6% Fibonacci retracement |
| Resistance 2 | 160.74 | 100% Fibonacci retracement area |
| Support 1 | 157.90 | 50% Fibonacci retracement |
| Support 2 | 157.87 | 20-period EMA reinforcing nearby support |
| Support 3 | 157.23 | 38.2% Fibonacci retracement |
| Support 4 | 156.40 | Lower support zone |
| Swing low zone | 155.06 | Deeper downside reference area |
On the topside, initial resistance is located at the 78.6% Fibonacci retracement at 159.52, with a subsequent technical barrier around the 100% retracement near 160.74. On the downside, immediate support is seen at the 50% retracement at 157.90, bolstered by the 20-period EMA at 157.87. If selling pressure intensifies, traders would look to the 38.2% retracement at 157.23, followed by support near 156.40 and the swing low region around 155.06.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
