[USD/JPY Latest Chart Analysis] Key Turning Points and Future Strategies from the 1-Hour Timeframe (May 13, 2025 Edition)

USD/JPY Analysis – Consolidation at High Levels Continues, Watch for Both Pullback and Rebound Scenarios

Overview (May 13, 2025)

USD/JPY is currently trading around 147.88, entering a consolidation phase after a sharp rally on May 12. After reaching a new high near 148.40, a slight pullback has occurred, and price is now fluctuating within the 147.80–148.20 range. The 1-hour chart indicates fading overbought signals and short-term profit-taking pressure, suggesting the pair may either form a dip for a rebound or enter a corrective phase.

Key Point 1: Divergence and Convergence of Moving Averages Signal Possible Correction

The 50-hour moving average (blue line) is currently trending upward around 147.40–147.50, while the 200-hour moving average (red line) is rising more gradually around 145.50. This setup indicates a continued mid-term uptrend, but the widening gap between price and the moving averages is now showing signs of convergence. Although the candlesticks remain above the 50MA, the slowing momentum suggests a potential entry into a corrective phase.

Key Point 2: ADX and DMI Indicate Trend Fatigue

The ADX (yellow line), a technical indicator measuring trend strength, surged to around 0.60 but is now clearly trending downward. ADX values between 0.40 and 0.60 indicate a strong trend, but a decline from this range often signals trend exhaustion or reversal. In DMI, while the +DI (green line) remains above the −DI (red line), the gap is narrowing, suggesting waning bullish momentum.

Key Point 3: Declining Volume Suggests Weakened Momentum

During the rally on May 12, trading volume increased significantly, confirming strong buying demand. However, as price holds near the highs, volume has decreased notably, indicating a temporary retreat of buying interest. Sustained volume is essential for trend continuation, and a “low-volume high” often serves as a signal for potential pullback or range-bound conditions.

※Image source: cTrader platform

Outlook and Trading Strategy

Traders should monitor the following technical factors to refine their strategies for USD/JPY:

• Support Zone at 147.50–147.60: This area aligns with the 50-hour MA and may present a good short-term buying opportunity.
• Resistance Zone at 148.30–148.50: A breakout here may lead to a move toward the 149.00 level. However, a breakout without volume carries the risk of a false signal.
• Watch for ADX dropping below 0.30: This is a clear signal of trend termination, suggesting potential correction or a transition into a sideways market.

Example Trade Scenarios

Bearish Scenario (Targeting Pullback)
Entry: Short after a confirmed break below 147.50
Target: 146.80–146.50
Stop Loss: Above 148.20 (new high)

Bullish Scenario (Buying on Dip)
Entry: Long after confirming a rebound near 147.50
Target: 148.30–148.50
Stop Loss: Below 147.30

Breakout Scenario
Entry: Long after a breakout above 148.50
Target: Around 149.00
Stop Loss: Below 148.00

Conclusion:

USD/JPY remains in a consolidation phase near its highs, with both pullback risks and dip-buying opportunities in view. Several technical indicators suggest a short-term correction may occur. Therefore, careful risk management and flexible strategy adjustments are essential. Focus on the 147.50–148.50 range and prepare for a potential breakout in either direction.

Disclaimer:

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any specific financial instruments. All trading decisions are your own responsibility.
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