USD/JPY Price action Forecast: Will 157.724–158.110 Resistance Trigger a Drop?

USD/JPY’s price forecast carries a near-term bearish bias as the weekly chart remains in a bearish market structure, with price retesting a major weekly resistance zone.

The 157.724–158.110 weekly resistance zone, bearish candlestick rejection at a potential lower high, and the daily bearish structure keep sellers in focus. Price is also trading below the 50 EMA, adding further bearish confluence.

This USD/JPY technical analysis examines the weekly and daily market structure, key resistance levels, and the confirmation needed for both bullish and bearish scenarios.

Will USD/JPY reject the 157.724–158.110 resistance zone and continue lower, or will a confirmed breakout open the way towards 160.155?

Key Takeaways

1. Weekly market structure remains bearish, with price forming lower highs and lower lows.
2. Price is retesting the major 157.724–158.110 weekly resistance zone.
3. Bearish candlestick rejection is developing at resistance and around a potential lower-high area.
4. Daily structure remains bearish, with price trading below the weekly resistance zone.
5. Price is retesting the double-top neckline on the daily chart.
6. Price remains below the 50 EMA, providing additional bearish confluence.
7. A confirmed breakout and retest above 157.724–158.110 could shift attention towards 160.155.
8. A confirmed rejection from resistance could keep 154.470 in focus.

What High-Impact News Can Drive USD/JPY This Week?

Key U.S. economic data and Federal Reserve updates can increase volatility in USD/JPY, especially inflation, employment, interest rates, and economic growth data.

These releases can trigger breakouts or false breakouts around the 157.724–158.110 weekly resistance zone.

High-Impact News. Source: Finlogix

For USD/JPY technical analysis, news should be treated as a catalyst, not a trade signal. Traders should wait for price action confirmation after the initial volatility.

Watch for:

1. A break and retest above 157.724–158.110.
2. A bearish rejection from the weekly resistance zone.
3. A false breakout before price reverses.
4. A move that strengthens or invalidates the current bearish USD/JPY market structure.

News creates volatility, but price action confirms the trade setup. Wait for the market to show its hand.

USD/JPY Technical Analysis: Weekly and Daily Trends

USD/JPY Weekly Chart: Bearish Structure Meets Major Resistance

Weekly Timeframe Price Action Analysis. Price retesting Weekly Level

USD/JPY remains in a bearish market structure on the weekly chart, with price continuing to form a sequence of lower highs and lower lows.

Understanding these market structure formations is essential when assessing whether a trend is continuing or beginning to change.

Weekly Timeframe Price Action Analysis. Price Retesting Weekly Head and Shoulder Neckline

Price has now returned to the 157.724–158.110 weekly resistance zone, which also aligns with the neckline of a potential Head and Shoulders pattern. This makes the area an important decision zone for determining whether the broader bearish structure can continue.

The current weekly setup includes:

1. Established bearish market structure
2. Price retesting major weekly resistance
3. Price retesting the Head and Shoulders neckline
4. Bearish candlestick rejection at the resistance area
5. Price approaching a potential lower-high formation

The Head and Shoulders neckline retest adds further confluence to the bearish setup. However, the pattern and resistance rejection should not be treated as confirmation on their own.

For the bearish scenario to strengthen, sellers need to defend the 157.724–158.110 resistance and neckline zone and generate follow-through on the lower timeframes.

This makes price action at key levels particularly important, as the reaction around the neckline and resistance can provide confirmation of whether sellers or buyers are gaining control.

Conversely, a sustained weekly breakout above the 157.724–158.110 resistance and Head and Shoulders neckline would weaken the immediate bearish structure and shift attention towards the bullish scenario.

USD/JPY Daily Chart: Bearish Structure Below Weekly Resistance

Daily Timeframe Price Action Analysis. Price Broke Weekly Level and Retesting it as Resistance

The daily chart also maintains a bearish market structure, with price trading below the 157.724–158.110 weekly resistance zone.

Daily Timeframe Price Action Analysis. Price Retesting Both Double Top Neckline and 50 EMA

Price is also retesting the double-top neckline, creating another important decision area. A rejection from this level would provide additional confluence for the bearish setup.

The daily chart shows:

1. Bearish market structure
2. Price trading below weekly resistance
3. Double-top neckline retest
4. Price trading below the 50 EMA
5. Potential continuation if sellers defend resistance

The combination of market structure with support and resistance helps establish the broader context for the setup.

The 50 EMA provides additional context because price remains below the indicator while the broader daily structure is bearish.

Traders can also use EMA price action analysis to assess whether the moving average is acting as dynamic support or resistance.

However, the EMA should be treated as supporting evidence rather than confirmation by itself. The key confirmation remains how price reacts around the resistance and neckline area.

USD/JPY Support and Resistance Levels

Identifying support and resistance levels helps define where traders can monitor potential breakouts, retests and reversals.

The central question is whether 157.724–158.110 remains resistance or becomes support.

The target levels are conditional objectives rather than guaranteed outcomes. Confirmation should come from completed price action and a successful retest rather than an intraday move alone.

USD/JPY Price Forecast: Bullish and Bearish Scenarios

Bullish Scenario: Break and Retest Above 157.724–158.110

Daily Timeframe Price Action Analysis. Bullish Bias Anticipation

For the bullish scenario, USD/JPY needs to break and close above the 157.724–158.110 weekly resistance zone.

A breakout alone would not provide the strongest confirmation. Ideally, price should return to the broken resistance and successfully hold the area as support.

A successful break-and-retest would indicate that the former resistance zone is transitioning into support.

Bullish Confirmation Checklist:

Daily Timeframe Price Action Analysis. Bullish Take Profit and Stop-loss Placement

1. Price breaks and closes above 158.110.
2. Price holds above the 157.724–158.110 zone.
3. The previous resistance area is successfully retested as support.
4. A completed bullish rejection candle forms during the support retest.
5. Price breaks above a nearby daily or 4-hour swing high, providing additional confirmation.
6. The 50 EMA is reclaimed and begins supporting the bullish structure.
7. Potential bullish target: 160.155.

An intraday spike above 158.110 would not be sufficient on its own. Waiting for a candle close and subsequent retest can help distinguish a genuine breakout from a false breakout.

A bullish engulfing candle or similar confirmation can also provide additional evidence during the support retest. Learn more about engulfing candlestick entry signals and how candlestick confirmation can be combined with price action.

Invalidation: A failed breakout followed by a sustained move back below 157.724, particularly if the resistance zone is reclaimed by sellers, would undermine the bullish breakout-and-retest setup.

Bearish Scenario: Weekly Resistance Holds at 157.724–158.110

Daily Timeframe Price Action Analysis. Bearish Bias Anticipation

For the bearish scenario, USD/JPY needs to retest 157.724–158.110 and reject the zone as resistance.

This scenario is supported by the existing bearish weekly structure, the potential lower-high formation, and the bearish daily market structure.

The daily double-top neckline retest and the 50 EMA provide additional areas to monitor for secondary resistance.

Bearish Confirmation Checklist:

Daily Timeframe Price Action Analysis. Bearish Take Profit and Stop-loss Placement

1. Price retests 157.724–158.110.
2. The weekly resistance zone continues to hold.
3. Price forms a completed bearish rejection candle at or below resistance.
4. The potential lower-high formation remains intact.
5. Price remains below the 50 EMA.
6. The daily double-top neckline continues to act as resistance.
7. Selling follows through with a break below a nearby daily or 4-hour swing low.
8. Potential bearish target: 154.470.

The strongest bearish confirmation would come from a combination of resistance rejection, bearish candlestick confirmation and downside follow-through.

For traders looking to understand how candlestick signals can support a price-action setup, bullish and bearish pin bars and Japanese candlestick confirmation can provide useful additional context.

The 50 EMA can provide additional confluence, but price action remains the primary confirmation.

Invalidation: A sustained break above 158.110, followed by a successful retest of 157.724–158.110 as support, would undermine the bearish resistance-rejection setup.

Final Take

USD/JPY’s near-term outlook remains bearish while price stays below the 157.724–158.110 weekly resistance zone.

The bearish setup is supported by the weekly bearish market structure, potential lower-high formation, daily bearish structure, double-top neckline retest and price trading below the 50 EMA.

A confirmed rejection and downside follow-through would keep 154.470 in focus.

On the other hand, a confirmed breakout above 157.724–158.110, followed by a successful support retest and bullish continuation, would shift attention towards 160.155.

The key is to wait for price action confirmation rather than anticipating the move before the market confirms the setup.

Watch the weekly resistance reaction. Wait for the candle to close. Let price action confirm the next move.

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Past performance and historical price movements are not reliable indicators of future results. Any price levels, targets, scenarios, or market outlooks discussed should be viewed as analysis rather than guarantees of future market performance. September 29, 2026