USDJPY Weekly 20 EMA Rejection Signals More Downside

After trending into the mid 160s, the collaboration between the US Treasury and BOJ has finally calmed the USDJPY’s rally since May of 2025.

The important event on the weekly chart is the break below the 20-week EMA ±1 standard-deviation band.

In my system, when an asset loses the lower edge of an EMA band it was previously trending on, that’s a bearish signal because price is changing its behaviour.

And last week, we had a retest of the 20W EMA and created a clear shooting star rejection candle.

This only adds to the idea that USDJPY could be now posited to the downside.

On the JXY and DXY, the yen and USD strength charts, we can also see two confluential signals:

JXY is at support at the 20W-EMA and rising channel’s low.

DXY is at resistance at 100.82 – 101.92 zone.

While this is happening, DXY is still in a bullish trend on the daily and 4H timeframe. Should the 4H-20 EMA band break, that would be the first sign of weakening.

LIVE NOTE — ADP + PCE JUST HIT

ADP and PCE have just landed, and the signals are mixed. September ADP private payrolls rose 90,000 vs 70,000 expected, a stronger labour print that leans hawkish. But the inflation revisions are pulling the other way.

August core PCE printed 0.2% MoM and 3.0% YoY, while July core was revised down to 0.1% MoM. The catch is that part of the cooler historical path comes from BEA methodology changes; especially the treatment of portfolio-management services, so this is not pure new disinflation.

FedWatch tool has now repriced further after PCE.

October hike odds are down to 37.1%, from 50.9% a day earlier and 70.9% a week earlier, while hold odds have risen to 62.9%.

US10Y also dropped sharply in the first five-minute candle after the release, adding to the loss of US rate support for USDJPY.

Scott Bessent must be happy.

Bottom Line: USDJPY should be trending lower in the foreseeable future unless a black swan occurs. The technicals and fundamentals are pointing in the same direction for now.