[USD/JPY Nearing Break Below 146?] Unstoppable Downtrend – Is 145 the Next Target?

USD/JPY Analysis – Approaching Break Below 146.00, Further Downside in Focus

Overview (May 15, 2025)

USD/JPY is currently trading around 146.04, with attention focused on whether it will break the psychological support level of 146.00. Following a short-term rebound, the pair has turned weak again, and the selling pressure continues to dominate. A comprehensive analysis of technical indicators such as Moving Averages (MA), ADX, DMI, and trading volume suggests a high probability of the downtrend continuing. In particular, the sluggish nature of the recent rebound raises the likelihood of a break below 146.00, which would bring the support zone of 145.50–145.20 into focus.

Key Point 1: Price Capped by Moving Averages

USD/JPY is currently fluctuating between the 50-hour MA (blue line) and 200-hour MA (red line), with the 50MA acting as a strong resistance level. Every attempt to rise has been met with selling pressure. This structure is typical of a return-to-sell setup, indicating strong bearish sentiment. A clear break below 146.00 may also lead to a breach of the 200MA, accelerating downward momentum from a technical standpoint.

Key Point 2: ADX and DMI Indicate Bearish Momentum

Looking at the indicators below the chart, the ADX (yellow line) is moving sideways at a low level, suggesting the early stage of a new trend. Meanwhile, the -DI (red line) continues to exceed the +DI (green line), indicating ongoing bearish momentum. As long as this condition persists, any short-term rebound may be followed by renewed downward pressure.

Key Point 3: Rising Volume Supporting Selling Pressure

Trading volume has shown a slight increase during the recent decline, suggesting that the selling pressure may be driven by both actual demand and speculative selling. If a break below 146.00 is accompanied by increasing volume, it may signal the market's readiness to test the next support zone at 145.50–145.20.

※Image source: cTrader platform

Outlook and Trading Strategy

USD/JPY’s direction going forward is expected to be determined by the following technical levels:

• Clear break below 146.00 support: If breached, the next target is 145.50–145.20.
• Failure to break above the 50-hour MA: Even if the price rises, it may face renewed selling, making a sell-on-rally strategy effective.
• ADX surpassing 0.20: A rising ADX would be key in confirming a trend formation.

Example Trade Scenarios

Bearish Scenario (Targeting Downside)
Entry: Short entry after a clear break below 146.00
Take-Profit Target: 145.50–145.20
Stop-Loss: Above 146.30

Bullish Scenario (Short-Term Rebound)
Entry: Long entry after confirming a rebound near 146.00
Take-Profit Target: 146.40–146.60
Stop-Loss: Below 145.80

Conclusion:

USD/JPY remains under bearish pressure, as confirmed by multiple technical indicators including the moving averages and DMI. The key level of 146.00 is crucial for determining the next leg down. Should the ADX rise and confirm trend formation, bearish positions may gain further advantage. While short-term rebounds are possible, disciplined risk management remains essential for all trades.

Disclaimer:

This article is for informational purposes only and does not constitute investment advice. All trading decisions are the sole responsibility of the reader.
For technical analysis of other currency pairs and market forecasts based on the latest economic data, please visit our FIXIO blog for updates.