USD/JPY Support Test Hinges on Core PCE Release

The USD/JPY currency pair has been experiencing a dichotomous backdrop, with longer-term charts indicating a bearish trend and shorter-term charts showing bullish activity.

Last week, the pair tested resistance at 159, leading to a pullback to support level 156.68, which provided a bounce of over 100 pips yesterday.

However, bulls have not continued their push, which may be due to the heavy dose of data expected in the latter half of the week, including tomorrow's release of Core PCE in the United States.

The weekly chart shows a recent shift towards a bearish trend, with a similar dynamic observed over the past five years, where buyers test fresh highs only to see prices retrace sharply upon reaching resistance levels.