USD/JPY Buyers Challenge a Key Resistance Ahead of U.S. GDP Report
Market Overview
The U.S. dollar has strengthened, driven by higher Treasury yields and renewed optimism about the U.S. economy under the prospect of another Trump administration. Investors are closely watching economic growth prospects and potential trade policies, which could impact global markets.
U.S. Treasury yields rebounded on Thursday, with the 2-year yield rising from its lowest level since November 1 to 4.1%, while the 10-year yield climbed from Wednesday’s low of 4.245% to 4.2924%. The stronger yields have provided additional support for the USD/JPY pair, pushing it toward a key resistance level.
Technical Analysis
On the 2-hour chart, USD/JPY is attempting to break out of its descending regression channel, with buyers pushing the price towards the key 149.882 resistance level, which aligns with the upper boundary of the declining channel.
If buyers successfully breach this resistance, it would confirm a bullish breakout, opening the door for an initial test of 150.193, followed by higher targets at 150.588 and 151.024. The RSI has moved above the 50-level, indicating a strengthening bullish bias, while the MACD histogram is expanding above zero, reinforcing upward momentum.
However, if sellers regain control, the rejection of resistance could drive the pair back inside the descending channel, with immediate support levels at 149.446 and 148.740. A confirmed break below 148.740 would invalidate the bullish scenario and reaffirm the downtrend.
Key Technical Levels
- Resistance Levels: 149.882, 150.193, 150.588, 151.024
- Support Levels: 149.446, 148.740
Fundamental Drivers
Today’s U.S. economic calendar is packed with high-impact data releases. Investors are focusing on durable goods orders, jobless claims, and core personal consumption expenditures (PCE) inflation, a key inflation gauge for the Federal Reserve. However, the highlight of the session will be the U.S. Q4 GDP report, which could set the tone for dollar demand.
Stronger-than-expected GDP growth would fuel expectations of a resilient U.S. economy, potentially reinforcing hawkish Fed expectations and further supporting USD/JPY. Conversely, a weaker reading might raise concerns about a slowing economy, putting downward pressure on the greenback.
Conclusion
The USD/JPY pair is testing a critical resistance level, with bullish momentum building as Treasury yields climb. A break above 149.882 would confirm an upside breakout, while a rejection at resistance could push the pair back into the descending channel. U.S. GDP data and other key economic indicators will play a crucial role in determining the pair’s next move.
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