USD/JPY – Uptrend Resumes After Limited Correction, Focus Returns to Long-Term Peak

USD/JPY surged in early Monday trading, putting the pair on track to fully retrace last week’s pullback from 162.84 to 160.47. The decline appeared to be a healthy correction within the broader uptrend, finding support at the 23.6% Fibonacci retracement of the 155.02–162.84 rally.

The completion of a bullish reversal pattern on the daily chart reinforces the positive outlook, suggesting that traders have used the recent dip to re-establish long positions at more attractive levels. Market sentiment has also been supported by the continued lack of direct intervention from Japanese authorities, despite their near-daily warnings about readiness to act.

The correction has helped reset technical conditions, with daily indicators returning to a firmly bullish stance and creating room for a renewed advance. This keeps the focus on a retest of the multi-decade high at 162.84, reached last week, with potential for an extension into territory last seen in 1986.

Nevertheless, traders remain mindful of intervention risks and are awaiting Wednesday’s release of the FOMC minutes for further insight into the Federal Reserve’s policy outlook. Recent dovish remarks from Fed Chair Powell, combined with fading expectations for additional rate hikes—particularly after softer-than-expected NFP data—could continue to temper support for the dollar and reduce prospects of a September rate increase.

Res: 162.84; 163.57; 164.24; 164.50
Sup: 161.83; 161.24; 161.00; 160.47