USDJPY rebounds from key support zone and eyes next resistance target

The USDJPY extended lower today, breaking beneath a critical swing area between 140.248 and 140.80, but quickly rebounded after testing key technical support.

Yesterday’s low stalled right at the 61.8% Fibonacci retracement of the move up from the July 2023 low to the February 2024 high, coming in at 140.483. The price action today confirmed the importance of that retracement level, as buyers have stepped in once again on the move back above the level, lifting the pair back above the swing area high at 140.80. The high just reached 140.913. Buyers are making a play.

This marks at least the fifth test of this swing area support zone (see red numbered circles), with buyers consistently defending the area over the last several months. The repeated bounce underscores its significance from a technical perspective and staying above today, will be bullish play – at least in the short term.

With the rebound gaining momentum, the next upside target comes on the daiy chart, comes in at the 141.67 level, which aligns with a prior swing high and intermediate resistance on the daily chart.

To keep the bullish bias intact, buyers will want to see price stay above 140.24-140.80. A move below that area would weaken the rebound narrative and shift the short-term bias back to neutral or bearish.

Looking at the hourly chart, USDJPY has seen a sharp and sustained decline throughout April, falling from a high of 150.48 on April 2 to a low of 139.886 today—a drop of 1,059 pips in just a few weeks. Today’s move broke below both a key swing area and the psychological support level at 140.00, before rebounding back above that threshold.

With the price now attempting to push back above the daily swing area, there’s growing potential for short-covering or corrective buying. The next upside target comes at the 100-hour moving average, currently trending lower at 141.686. A break above that level would shift momentum further toward the 200-hour moving average at 142.54.

Even then, a full retracement remains distant—the 38.2% retracement of the April trading range comes in at 143.93, highlighting that there’s still plenty of room for recovery if buyers can gain traction.

The key question now: Can buyers begin to turn the tide?

For that to happen, it’s essential that price action holds above the 140.248–140.80 swing area, now serving as critical support. Holding that zone keeps the door open for further upside correction. A move back below would weaken the recovery narrative and reassert bearish control.