USDJPY hovers at 61.8% retracement as bulls and bears clash

Following a turbulent close to last week, USDJPY has returned to a pivotal technical juncture.

During Friday's session, the pair climbed sharply after the market perceived the Bank of Japan's interest-rate hike as dovish. The advance reached 158.05, slightly above the notable swing zone spanning 157.90 to 158.04.

Sellers pushed back against that resistance area, driving the price down modestly. Later, reports emerged that the BoJ was checking market rates—frequently interpreted as a form of verbal intervention—sparking a more pronounced drop.

The decline carried USDJPY below the 61.8% retracement at 157.536, with support eventually appearing near the 50% midpoint at 156.656. That midpoint corresponds to the volatile range that began on September 2.

Buyers hold the 50% midpoint

The price dipped under the 50% retracement on two separate hourly candlesticks Friday and once more during today's Asia-Pacific trading.

Each breach, however, failed to generate sustained downside. The dips stalled, and buyers re-entered the market.

Since then, USDJPY has trended modestly higher hour by hour. Today's peak reached 157.52, placing the pair near the 61.8% retracement at 157.536, with the current price around 157.455.

The 61.8% retracement thus becomes the immediate point of contention.

What would shift control to buyers?

A sustained move above 157.536 would reinforce the short-term bullish stance and pave the way for another attempt at the 157.90–158.04 swing zone.

That area halted Friday's rally, serving as a key gauge for both sides. A decisive break above 158.04 would signal a more substantial bullish shift and could spur further upside.

Until then, buyers face an uphill task.

Can sellers use the 61.8% retracement?

Sellers might view 157.536 as a favorable low-risk entry point to reestablish short positions.

If the price fails to push convincingly above that level, a pullback toward the 50% midpoint at 156.656 remains plausible.

A drop below 156.656—especially one accompanied by momentum—would tilt control back toward sellers. The rising 100-hour moving average, currently near 156.247, would then emerge as the next downside target.

Key technical levels

• 157.536: 61.8% retracement and immediate resistance
• 157.90–158.04: Key swing resistance area
• 156.656: 50% midpoint and important support
• 156.247: Rising 100-hour moving average
• 155.776: 38.2% retracement
• 155.04–155.21: Lower swing support area

Trading lesson: Let the market prove the break

Retracement levels are not guaranteed reversal points. Rather, they highlight zones where buyers and sellers are likely to compete for dominance.

Here, the 50% midpoint acted as support, while the 61.8% retracement now serves as resistance. These two levels have established distinct technical boundaries.

For traders, the next signal will come from a break beyond these boundaries. Yet a brief excursion above or below a level is often insufficient; traders should also watch for momentum and the ability to hold beyond the level.

Buyers have successfully defended 156.656, but they now need to demonstrate they can push and sustain above 157.536. If they fail, sellers could gain another chance to drive the price lower.

For now, the lines are drawn. The price action will reveal which side gains the upper hand.