USD/JPY: A Pivotal Test of Resistance

As noted in our latest review, USD/JPY is a very bearish reading as it still moves inside of its descending channel. The pair broke its former support at 146.500, retested it and confirmed it as a resistance level which is crucial for this pair. A convincing surge above this level would mark a bullish transition, possibly extending towards the 149.000 resistance, but there is a slim chance of that happening.

Technically, the price's interaction with the 146.500 boundary after the breakout is pivotal. As it stands, it validated the bearish sentiment. However, a break above could signal a trend reversal, offering a strategic buying opportunity.

Our stance is bearish, but considering the latest CPI report, which is coming out later today, may inject volatility so we trade with caution. The anticipation around these figures, especially following last month's lower-than-expected data and Powell's recent speech, will likely influence the pair's next moves. As we proceed, our approach is cautious yet opportunistic, ready to capitalize on the market's reaction to the interplay of technical patterns and fundamental events.