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The USD/JPY pair has declined for the second consecutive day, reaching a two-week low during the European session on Friday. The pair initially rose to the mid-161.00 level before reversing downward, testing the 23.6% Fibonacci retracement level at 161.00. This move follows broader uncertainty in global markets, with the Yen gaining traction as a safe-haven asset amid shifting risk appetite. Traders are closely monitoring whether the 161.00 level will hold as support or if further weakness could push the pair toward the 158.00 psychological level.
For forex traders, the breakdown below key Fibonacci levels signals potential bearish momentum, especially if the Yen continues to strengthen against the Dollar. The pair’s volatility highlights the importance of technical analysis tools like Fibonacci retracements and support/resistance levels in identifying entry and exit points. Broader macroeconomic factors, including divergent monetary policies between the US Federal Reserve and the Bank of Japan, could also influence the pair’s trajectory.
Investors should watch for a potential test of the 158.00 level as the next major support target. A sustained move below this level could open the door for further declines toward 155.00. Conversely, a rebound above 161.00 might attract buyers, potentially reversing the downward trend. Market participants should remain cautious as central bank interventions and global risk sentiment remain key variables.
