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The USD/JPY bulls attempted a significant breakout above key technical levels, including the 100-hour moving average and the previous week’s high of 156.826, reaching a session high of 157.75. However, the momentum collapsed as buyers failed to sustain the move beyond critical resistance at 157.65, leading to a reversal. This technical failure signals a potential shift in control back to sellers, with immediate targets at 156.826 and the 100-hour MA. The breakdown at 157.65 is a bearish signal, indicating that buyers must reclaim this level to reassert dominance. For forex traders, the USD/JPY reversal highlights the importance of key resistance levels in driving short-term price action. The failed breakout suggests increased volatility and potential for a corrective decline, which could attract short sellers. Traders should monitor the 157.65 level as a critical psychological and technical threshold. A sustained move below 156.826 could trigger further downside, testing the 100-hour MA as support. The implications for global forex markets are significant, as USD/JPY is a major carry trade currency. A breakdown could weaken the Yen’s appeal, impacting related cross-pairs like EUR/JPY and AUD/JPY. Investors should watch for follow-through selling below 156.826 and potential central bank interventions, especially from the Bank of Japan. The next 48 hours will be critical for determining whether buyers can stage a counterattack or if sellers will continue their downward trajectory.
