USDJPY extends gains for a third consecutive day amid geopolitical tensions and elevated US inflation pressures

USDJPY extended its rally into a third consecutive session, supported by growing geopolitical uncertainty after Middle East peace talks stalled, which reinforced demand for the dollar as a safe-haven asset. Additional support came from the latest rise in US inflation, which strengthened expectations that the Federal Reserve will maintain a hawkish policy stance, further underpinning the greenback.

The pair’s latest advance followed a sharp pullback triggered by intervention from Japanese authorities, though bearish momentum faded after repeated failures to break below the base of the thick daily cloud. The formation of multiple bear traps helped shift momentum back to the upside and sparked a strong rebound.

Bulls broke through the key 157.90 resistance zone, marked by the May 5 lower top, daily Kijun-sen and the 50% retracement of the 160.72/155.02 decline. A sustained break and daily close above this barrier is needed to confirm a fresh bullish signal and improve the near-term technical structure, which remains fragile as the 14-day momentum stays in negative territory, stochastic indicators remain overbought and moving averages continue to show a mixed setup, warning that upside attempts could face stronger resistance.

At the same time, a weekly Doji reversal pattern is taking shape and continues to provide support, while broader weekly studies remain predominantly bullish.

Attention remains firmly on geopolitical developments, which continue to heavily influence market sentiment, as well as on price action around the key 157.90 pivot.

A decisive break above this level would pave the way for further recovery toward 158.55, the 61.8% Fibonacci retracement, followed by the more significant daily cloud top at 158.81.

On the downside, failure to clear the 157.90 barrier on the first attempt could keep the pair in a consolidation phase, with the 100-day moving average at 157.36 expected to provide strong support and keep near-term bullish sentiment intact.

Res: 157.90; 158.25; 158.55; 158.81
Sup: 157.50; 157.36; 157.10; 156.72