USDJPY – recovery challenges key resistance levels, false downside break supports the move

USDJPY regained upside momentum on Wednesday after dipping to its lowest in nearly a month on Tuesday.

The sharp downside rejection created a bear trap below the daily cloud base and formed a Hammer candle, both adding to positive near-term signals.

Key resistance at the 147.60 area (daily cloud top and converging 10/20 DMAs) is under pressure, with a sustained break expected to improve structure and open the way towards 148.05/46 (Fibo) and the major barrier at 148.70 (200DMA).

Bias remains tilted to the upside while holding above the 55DMA at 147.18, though caution is warranted as daily indicators stay in bearish setup, with RSI below 50 and momentum in negative territory.

Focus now shifts to Thursday’s US August inflation release, which will provide the last major signal ahead of next week’s FOMC meeting.

Res: 147.72; 148.05 148.46; 148.70
Sup: 147.39; 147.18;146.70; 146.30