USD/JPY – Bearish momentum softens, though downside risks remain

USD/JPY extended its losing streak for a third straight session on Thursday, deepening the decline and touching a three-week low.

Fresh selling pressure drove the pair below key support at 146.80/70 (50% retracement of the 142.68–150.91 rally / early August higher base). A daily close beneath this zone would confirm a bearish breakout, completing an asymmetric Head & Shoulders pattern on the daily chart and paving the way for a move toward 145.85/82 (July 24 higher low / 61.8% Fibonacci) and 145.50 (100-day moving average).

The dollar remains weighed down by mounting expectations of a Federal Reserve rate cut in September, with the possibility of one or two additional cuts before year-end.

Still, the downside may stall in the near term after a sharp intraday rebound from Thursday’s low signaled rising headwinds. Technical indicators remain mixed—moving averages show a conflicting setup, with a bullish 55/100DMA cross offset by a bearish 10/20DMA cross, while the 14-day momentum sits at the neutral line.

The falling 10DMA (147.47) should cap any recovery and protect the 20DMA (147.78) as the key resistance.

Stronger directional cues are likely to emerge from the Trump–Putin summit, with Monday’s market open expected to be closely watched.

Res: 147.47; 147.78; 148.51; 148.97
Sup: 147.09; 146.80; 146.12; 145.82