USD/JPY Nears Key Inflection Zone as Rally Approaches 4% Recovery

USD/JPY has staged an impressive recovery after hitting its September low, rebounding nearly 4% in the process. The shift in momentum has improved the near-term technical backdrop, but the rally is now approaching a key inflection zone where buyers will need to prove they can sustain the advance.

The weekly RSI (14) is attempting to reclaim neutral territory for the first time since early August, while daily and 4-hour RSI are turning aggressively in favor of the bulls. The recovery is nearing the 61.8% retracement of the decline off the yearly high at 159.75, a level that converges with the 2025 channel line and the 75% parallel of the downslope.

A breach or weekly close above this threshold would be needed to fuel the next leg of the rally, with subsequent resistance objectives eyed at the 2024 high-week close and the April high at 160.74, as well as the 2024 swing high at 161.95.