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USD/JPY extended its gains for the second consecutive session, trading near 157.60 in European hours on Friday. Technical analysis on the daily chart shows a sustained bullish bias, with the pair remaining within an ascending channel pattern. The price action suggests a strong upward momentum, supported by the channel's upper boundary and key resistance levels. Traders are closely monitoring the 157.50 psychological level, which has acted as a temporary support, while the next immediate resistance is seen at 159.00. This bullish trend is significant for forex traders, particularly those with exposure to the yen or dollar. A sustained move above 159.00 could trigger further gains, driven by continued U.S. dollar strength against the Japanese yen amid divergent monetary policies. Conversely, a breakdown below the ascending channel could signal a reversal, testing the 155.00 level. The pair's performance will also influence cross-currency pairs like EUR/JPY and AUD/JPY. For markets, the USD/JPY movement reflects broader dollar demand and Japan's Bank of Japan (BoJ) policy stance. Investors should watch for BoJ's intervention signals or U.S. Federal Reserve rate decision updates. Key technical indicators, including the RSI and MACD, remain in overbought territory, suggesting a potential consolidation phase before the next major move.
