USD/JPY Bulls Eye Breakout Above Key Resistance

The USD/JPY pair has been on an uptrend for the fourth consecutive day, reaching near its weekly high. Despite this, the rally lacks conviction ahead of key economic releases from Japan and the US. The recent dip to 159.00 during the Asian session was short-lived, as the price bounced back.

The US inflation data released on Wednesday reinforced market expectations for a rate hike in 2026, which is supporting the US Dollar. The Japanese Yen, on the other hand, is struggling due to the wide US-Japan rate gap and concerns about Japan's fiscal condition.

The technical analysis suggests that the price action over the past two weeks has been bullish consolidation against the backdrop of a solid recovery from 155.25-155.20 region. The Relative Strength Index (RSI) is around 57, and the Moving Average Convergence Divergence (MACD) is posting slightly positive readings.

A move beyond 159.63, representing the 50% Fibonacci retracement level, is needed to unlock a more decisive advance. Key levels above this include 160.66 (61.8% Fibo.) and 162.13 (78.6% retracement), while support below includes 158.90 (100-period SMA) and 157.33 (23.6% level).