USDJPY remains under pressure below key resistance at 160.00

The USDJPY rate is attempting to recover, but the technical picture suggests continued downside risks within a bearish Flag pattern. The rate currently stands at 159.28. Discover more in our analysis for 29 May 2026.

USDJPY forecast: key takeaways

• Risks of currency intervention by the Japanese authorities remain
• Retail sales in Japan rose at the fastest pace over the past year
• Japan’s industrial production unexpectedly increased
• USDJPY forecast for 29 May 2026: 158.65

Fundamental analysis

The USDJPY pair is recovering and showing growth after rebounding from the 159.25 support level. A day earlier, the quotes declined after buyers failed to reach the psychological resistance level at 160.00. The pair is now attempting to resume the uptrend despite the risks of currency intervention from Tokyo.

The Japanese yen received temporary support following statements from Finance Minister Satsuki Katayama, who warned that the authorities are ready to intervene in trading in the event of excessive speculative activity. Strong macroeconomic data from Japan also contributed to the yen's strength. Retail sales rose at the fastest pace in a year, while industrial production unexpectedly increased, indicating the resilience of the domestic economy.

In addition, Japan’s May consumer confidence index rose to 33.6 from 32.2 in the previous month, exceeding market forecasts of 32.0. The indicator reached its highest level since February thanks to improved sentiment across all categories, from income growth to willingness to buy durable goods. Nevertheless, market participants are still ignoring the strong figures, favouring the US dollar.

Technical outlook

The USDJPY pair is on the rise but remains within the bearish Flag pattern. Despite attempts at growth, selling pressure persists, with today’s USDJPY forecast suggesting a further decline to 158.65.

The technical picture remains favourable for downward momentum. The Stochastic Oscillator has reached overbought territory and formed a bearish crossover, signalling likely stronger bearish pressure. A breakout below the lower boundary of the Flag pattern, with the price consolidating below 159.20, would further confirm the decline.

An alternative scenario suggests stronger buyer interest if the price breaks above the Flag pattern’s upper boundary and consolidates above 159.45. This would signal the invalidation of the pattern and the resumption of the upward move towards 160.05.

USDJPY overview

• Asset: USDJPY
• Timeframe: M15 (Intraday)
• Trend: upward with risks of a deep correction
• Key resistance levels: 159.35 and 159.60
• Key support levels: 159.05 and 158.80

USDJPY trading scenarios for today

Main scenario (Sell Stop)

A breakout below the Flag pattern’s lower boundary and consolidation below 159.15 would indicate that conditions are forming for opening short positions.

• Take Profit: 158.65
• Stop Loss: 159.40

Alternative scenario (Buy Stop)

A breakout above the pattern’s upper boundary and consolidation above 159.45 would invalidate the Flag pattern and strengthen bullish pressure.

• Take Profit: 159.80
• Stop Loss: 159.05

Risk factors

Risks to the USDJPY downside scenario are linked to a possible breakout of the Flag pattern’s upper boundary and consolidation above 159.45, which would signal an upward move. Further strengthening of the US dollar, potentially leading to a retest of the psychological resistance level at 160.00, could provide additional support to buyers.

Summary

USDJPY technical analysis suggests continued bearish pressure within the Flag pattern, with the potential for a decline towards 158.65. However, a breakout above the 159.45 level would invalidate this scenario and return the currency pair to growth.

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