USD/JPY Price Forecast: Hammer pattern points to rebound potential near 156.00

A hammer candle near support suggests scope for a USD/JPY recovery.
Despite signs of a reversal, sellers retain the advantage as the bearish RSI sits below neutral.
USD/JPY faces a recovery ceiling at 157.57, with a break beneath 156.08 opening the way to 155.00.

USD/JPY lost over 0.74% over the week, leaving the Japanese Yen stronger, although the pair held steady on the day against a backdrop of subdued market sentiment. Trading at 156.85, the pair is developing a ‘hammer candle pattern’.

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USD/JPY Price Forecast: Pair remains rangebound

Further sideways trading looks consistent with the price action as USD/JPY remains confined to the 300-pip range of 156.00-159.00. Neither side has managed a decisive break through the immediate support or resistance marking the range boundaries.

With the 14-day Relative Strength Index (RSI) slipping beneath the neutral 50 level, momentum has turned bearish, signalling that sellers are gaining strength.

The downside therefore remains the path of least resistance, with initial support at the psychological 156.50 level. Below that, the daily low of 156.08 recorded on 23 October comes into view, ahead of the 155.00 milestone targeted by sellers. Should that level give way, the 8 September swing low of 152.89 would be exposed.

For a recovery, USD/JPY first needs to contend with resistance at the 50-day Simple Moving Average (SMA) of 157.57. Further gains would bring the 100-day SMA at 158.50 into focus, ahead of the 200-day SMA at 159.35.

USD/JPY Daily Price Chart Shows Rangebound Trading

Japanese Yen Posts Its Largest Weekly Gain Against the US Dollar

The Japanese Yen recorded its strongest performance against the US Dollar this week. The table below sets out the percentage changes in the Japanese Yen (JPY) against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.15%	-0.46%	-0.77%	-0.81%	-1.12%	-0.74%	-0.14%
EUR	0.15%		-0.31%	-0.56%	-0.61%	-0.88%	-0.58%	0.03%
GBP	0.46%	0.31%		-0.25%	-0.30%	-0.56%	-0.26%	0.41%
JPY	0.77%	0.56%	0.25%		-0.05%	-0.35%	0.02%	0.75%
CAD	0.81%	0.61%	0.30%	0.05%		-0.29%	0.09%	0.71%
AUD	1.12%	0.88%	0.56%	0.35%	0.29%		0.30%	0.94%
NZD	0.74%	0.58%	0.26%	-0.02%	-0.09%	-0.30%		0.66%
CHF	0.14%	-0.03%	-0.41%	-0.75%	-0.71%	-0.94%	-0.66%

Percentage movements between the major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the Japanese Yen on the left and following its row across to the US Dollar gives the percentage change for JPY (base)/USD (quote) in the corresponding cell.