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The USD/JPY pair tested its 2024 high of 161.94 and a 40-year peak near 161.92 in early North American trading before retreating. Although buyers briefly pushed above last week's high, the level acted as a strong resistance, triggering a pullback to 161.09. Sellers regained control temporarily, but buyers re-entered near 161.09. Key technical levels now include the 100-hour and 200-hour moving averages at 160.94 and 160.61, respectively. A sustained break below these averages could signal a broader correction, but the overall uptrend remains intact unless bears overcome these barriers.
For forex traders, the USD/JPY's behavior at key resistance and moving averages is critical. The pair's inability to hold above 161.94 highlights the importance of technical levels in range-bound trading. Traders should monitor the 100-hour and 200-hour moving averages as potential support zones. A breakdown below these levels could shift momentum to sellers, while a rebound would reinforce the bullish trend. The 1986 high remains a symbolic target for buyers, but its psychological impact may influence market sentiment.
The USD/JPY's performance has implications for global forex markets, particularly for carry traders and those exposed to the Japanese Yen. A sustained decline could pressure Yen-based assets and impact risk-on sentiment. Investors in the Gulf and MENA region should watch for cross-asset correlations, especially with commodities like oil, which often move inversely to the Yen. Key upcoming data on U.S. inflation and Japanese monetary policy will also shape the pair's trajectory.
