USD/JPY Price Forecast: Does a hammer point to rebound risk near 156.00?

A recovery may be taking shape in USD/JPY, with a hammer candle emerging near support.
Despite signs of a reversal, sellers retain the advantage as the bearish RSI remains below neutral.
With recovery attempts capped at 157.57, a fall through 156.08 would bring 155.00 into focus.

Against a backdrop of weak market sentiment, USD/JPY held steady on the day but ended the week down over 0.74%, leaving the Japanese Yen stronger for the week. Trading at 156.85, the pair is forming a ‘hammer candle pattern’.

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USD/JPY Price Forecast: Can the Technical Picture Support a Recovery?

Further sideways trading remains consistent with the price action, as neither buyers nor sellers have decisively broken the immediate support and resistance boundaries. USD/JPY remains confined to the 300-pip range of 156.00-159.00.

Sellers are gaining strength, as indicated by the 14-day Relative Strength Index (RSI) slipping below the neutral mark of 50. This signals a bearish shift in momentum.

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

For a move higher, USD/JPY first faces resistance at 157.57, where the 50-day Simple Moving Average (SMA) stands. Further gains would bring the 100-day SMA at 158.50 into play, ahead of the 200-day SMA at 159.35.

Daily USD/JPY Price Chart

How Did the Japanese Yen Perform This Week?

The Japanese Yen recorded its strongest performance against the US Dollar this week. The table below sets out the Japanese Yen's (JPY) percentage changes 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 that row across to the US Dollar gives the percentage change for JPY (base)/USD (quote) in the corresponding cell.