[Shocking] USD/JPY Plunges! Will It Break Below 143? What U.S. Fiscal Woes and Technicals Reveal About What’s Next?

[Focus] USD/JPY Continues to Decline! With 143 Yen in Sight, What Does the Chart Tell Us Next?

Overview (May 22, 2025)

USD/JPY remains on a downward trend that began on May 17, 2025, currently trading around 143.41. The 1-hour chart shows candles moving below both the 50-hour and 200-hour moving averages, indicating a persistent sell-on-rally environment.

On the fundamental side, concerns over the widening U.S. fiscal deficit are fueling dollar selling and yen buying. According to Reuters, the Biden administration’s new spending plans may balloon the fiscal deficit to $3.8 trillion in 2025, intensifying risk-off sentiment among investors.

※Image source: cTrader platform

Technical Analysis: Key Indicators

1. Moving Averages (MA) Slope and Position

Both the blue 50-hour MA and red 200-hour MA are sloping downward. With candles below these averages, the market is in a clear downtrend. The 50MA acts as a resistance during temporary rebounds, making it difficult for the price to rise.

2. MACD (Momentum Indicator)

The MACD line (red) remains below the signal line (yellow), and the histogram is expanding in the negative zone—signaling a continued “dead cross” and supporting bearish momentum. Historically, this pattern is typical of a short-term downtrend continuation.

3. ADX (Trend Strength) and DI Lines

ADX (green) is hovering around 40, indicating strong trend strength. The -DI line is well above the +DI, confirming the dominance of the bearish trend. While ADX above 50 may signal overheating, current levels still support trend-following strategies.

4. Volume and Market Momentum

Volume has clearly increased during the recent decline since late May 21, showing strong selling pressure. Trading is concentrated around the 143.40 support level, making it a key level to watch for a potential break.

Support and Resistance Levels

• Short-term support: 143.40 (current price)
• Next support zones: 143.00, 142.80
• Short-term resistance: 144.00–144.50 (50MA to recent high)

If 143.40 is breached, further declines may accelerate. Even in case of a rebound, resistance near 144.50 could cap upside potential.

Strategy and Scenarios

Bearish Scenario:
Consider short positions after a clear break below 143.40. Target around 142.80. Stop-loss if price rises above 143.75.

Bullish Scenario:
If a sharp wick rebound or MACD cross is confirmed near 143.00, a short-term long may be considered. However, since this goes against the trend, entry should be cautious.

Conclusion

Currently, USD/JPY shows a clear bearish environment across charts, indicators, and fundamentals. The battle around 143.40 will determine the next direction. A break or bounce from this level may shift market sentiment significantly.

By integrating moving averages, MACD, ADX, volume, and understanding the news background, traders can make more informed decisions.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. All trading decisions are your own responsibility.
For other currency pair analyses, visit the FIXIO Blog.