Will 1986’s Highs Mark the End of a Strong USDJPY?

USDJPY remains above the 2024 high at 161.81 and the rising 100-day EMA band near 159.93, using a half-standard-deviation envelope. That band has held the broader uptrend well.

Price continues to make higher highs, while daily RSI is making lower highs. The bearish divergence shows weaker momentum, and has preceded a few notable declines on USDJPY – especially when the divergence taps into the overbought region.

The same setup is repeating now, and 1986’s high at 164.500 would be a critical resistance to watch for this setup to trigger.

If a decline happens, I would first expect ths 100 EMA band to hold. Only when USDJPY closes below the band, followed by weakness through 158 and softer AUDJPY or GBPJPY, would the data provide stronger evidence that yen-funded carry positions are unwinding.

As of now, AUDJPY and GBPJPY are still holding their 4H-50 EMA (1 standard deviation) bollinger band, but if that breaks, it would be the first short term sign of a strengthening Yen.

Cooling oil changes the intervention balance

WTI reached its bull-flag target above $90 before falling into its four-hour 50-EMA band and the 76.73-83.99 support region. The decline reflects the latest de-escalation move.

A rebound from this area would keep imported inflation and Fed caution in play. A deeper break would ease pressure on US yields and Japan’s energy bill, strengthening the case for a USDJPY pullback.

For now, the trend remains bullish above 161.81 and supported by the 4H-50 EMA band. The next test is whether 164.50 produces a clean breakout or a rejection strong enough to return USDJPY towards 159.93.