USD/JPY – Repeated upside rejections keep the pair vulnerable to downside risks

USD/JPY edged higher early Tuesday, recovering slightly after Monday’s 1.1% drop, which came on the heels of repeated upside rejections below key dual Fibonacci resistance at 144.13/21 (the broken 76.4% retracement of the 139.57–158.87 rally and the 38.2% of the 151.20–139.88 move).

Strong negative momentum on the daily chart and bearish alignment of most moving averages suggest that downside risks remain elevated. The recovery is likely to stall while the pair remains capped by the 144.13/21 resistance zone.

Lingering concerns over potential US tariffs continue to support the yen, reinforcing the outlook for a limited or corrective rebound before the broader downtrend potentially resumes.

Traders are also eyeing the Bank of Japan’s policy decision on Thursday, with broad expectations for rates to remain unchanged. Policymakers are likely to adopt a wait-and-see approach to assess the full impact of trade tensions before considering any shift in monetary policy.

Meanwhile, attention is turning to key US labor data due this week—including JOLTS, ADP, and Friday’s nonfarm payrolls—which are expected to offer fresh clues on the direction of the US economy and Fed policy.

Res: 144.13; 144.21; 144.55; 145.00
Sup: 141.94; 141.42; 140.47; 140.00