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USDJPY, Time frame: 1DThe U.S. dollar has come under heavy pressure against the Japanese yen, falling from the 2026 highs near 164.00 to the 153.00–154.00 support zone. The move reflects a major shift in the market fundamentals, as one of the most popular trades of recent years, the yen carry trade, begins to unwind.
As carry-trade positions are unwound, volatility has risen sharply, accelerating the pair's decline. With USD/JPY now testing a major support zone, traders are watching closely to see whether buyers can stabilize the market or if the broader correction has further room to run.
Oversold Bounce or Consolidation
With the RSI falling to 25.05 and price trading inside the 152.00–153.50 support zone, USD/JPY is entering an area where downside momentum may begin to slow. While the broader trend has weakened, oversold conditions often coincide with periods of consolidation or short-term rebounds as sellers take profits and buyers attempt to defend support.
Any recovery attempt would likely bring attention back to the 200-day EMA at 157.87 and the 158.99 Point of Control (POC). Both levels previously acted as support and now represent a key resistance cluster overhead following the recent breakdown.
Support Zone Remains Critical
The 152.00–153.50 region is a significant demand area that has attracted buying interest in the past. The market is currently testing whether this zone can absorb the recent selling pressure and stabilise price action.
Holding above this area could allow USD/JPY to enter a period of consolidation as the market reassesses value after the sharp selloff.
Bearish Continuation Risk
If price establishes a decisive daily close below 152.00, it would represent a break of a major support zone and shift focus toward lower support levels.
The next key areas beneath current price are:
150.00 (psychological support level)
148.00 (previous structural support zone)
A move into these levels would signal continued weakness following the loss of the 200-day EMA and the 158.99 POC.
Disclaimer: The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.
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