USD/JPY Price Outlook: Stays under 159.00 as buyers remain wary with weaker USD interest

USD/JPY Struggles Below 159.00 Amid Geopolitical Tensions

During Thursday’s Asian trading hours, the USD/JPY pair encountered resistance just before the 159.00 threshold, halting its modest rebound from levels below 158.00—a point not seen in nearly three weeks. Despite this, the pair maintains slight gains for the session, hovering near 158.70 to 158.75, reflecting an increase of about 0.10% on the day.

Ongoing instability in the Middle East, including continued disruptions in the Strait of Hormuz and mutual accusations of ceasefire breaches, persists even after a brief US-Iran truce. These developments have supported the US Dollar’s strength relative to the Japanese Yen, providing a lift to USD/JPY. However, bullish momentum appears limited as investors remain cautious in light of the Federal Reserve’s more dovish policy outlook.

Technical Overview

Technically, USD/JPY is holding above the 158.20–158.25 horizontal support, which aligns with the 200-period Exponential Moving Average (EMA), suggesting a constructive short-term outlook. The Relative Strength Index (RSI) sits around 42, indicating that selling pressure has eased and momentum is stabilizing, rather than signaling an oversold condition. This environment could allow for further recovery, especially with ongoing uncertainty in the region.

Nevertheless, the negative reading on the Moving Average Convergence Divergence (MACD) indicator points to the possibility that upward moves may lose steam unless the pair can break convincingly above the 158.22 support. A decisive drop below this level would undermine the current positive structure and could trigger a deeper pullback.

USD/JPY 4-Hour Chart