USDJPY extends its pullback on growing rate cut expectations, though key support levels remain intact

USDJPY extended its decline on Wednesday as dovish comments from Fed Chair Powell reinforced expectations for rate cuts in October and December, keeping the dollar under pressure.

Fresh bearish momentum drove the pair to a one-week low, though it encountered strong support at 150.90 (rising 10DMA and former August 1 top), which protects more significant zones at 150.76/72 (weekly cloud top and Fibo 38.2% of 146.59/153.27) and the psychological 150.00 level (aligned with the daily Tenkan-sen and Fibo 50% retracement).

Wednesday’s price action so far shaped into a Hammer candle, hinting that the corrective leg from the October 10 peak at 153.27 may be nearing exhaustion.

Overall, daily technical studies remain bullish — with multiple golden crosses, 14-day momentum firmly above the midline, and RSI holding near 60 — suggesting potential for larger bullish continuation after a relatively shallow correction.

A daily close above 150.90/72 would reinforce this view, though further upside confirmation requires a break above Tuesday’s high at 152.61 and the breached upper bull-channel boundary at 152.88.

On the other hand, a sustained break below 150.72 would generate a bearish signal and open the way for a deeper correction below the 150 pivot.

Res: 150.90; 151.86; 152.61; 152.88
Sup: 150.72; 150.00; 149.61; 149.14