[In-Depth Analysis] This is the Battle Line for USD/JPY! Forecasting the Future on the 1-Hour Chart

USD/JPY Analysis – Moving Averages and Volume Indicate a Tug-of-War, Will 144 Be Broken?

Overview (May 8, 2025)

As of May 8, 2025, USD/JPY is trading near 143.58. Although it approached the 144 level the previous day, it has since pulled back slightly and remains range-bound. Technically, the convergence of moving averages (MAs) and the behavior of ADX and DMI indicate a "calm before the trend," with no clear direction. Volume remains neutral, suggesting that further momentum is needed for a definitive breakout. Going forward, a trading strategy based on the 144.00 resistance and 143.30 support lines is expected.

Key Point 1: Convergence of MAs and Support/Resistance Flip

Currently, USD/JPY’s 50-hour MA (blue) and 200-hour MA (red) are aligned at nearly the same level, with price moving sideways around them. This convergence indicates a balance between buyers and sellers, suggesting a potential sharp move either up or down. The 50MA is acting as support, while the 200MA serves as resistance, forming a likely support/resistance flip pattern.

From a technical perspective, a clear breakout above 144.00 would signal the beginning of an upward trend by pushing through both MAs. On the other hand, falling below 143.30 would likely reinforce the moving averages as resistance, accelerating the downward move.

Key Point 2: ADX and DMI Indicate Emerging Buy Bias

Looking at the lower indicators, the ADX (yellow) is gradually rising within a low range (0.14–0.16). Since ADX is used to gauge trend strength and readings above 0.20 signal a clear trending market, the current phase can be considered the "initial stage."

Meanwhile, in the DMI, the +DI (green) is clearly above the -DI (red), suggesting a "bullish bias" is forming. If this continues and ADX breaks above 0.20, a move toward 144.30–144.50 becomes increasingly likely.

Key Point 3: Stagnant Volume a Warning Sign? Momentum Needed for Upside

Volume has shown no significant bias recently and is trending neutral to slightly lower. Although there was a temporary increase near 144, current momentum is insufficient to sustain a prolonged uptrend.

Notably, breakouts without accompanying volume are often "false," so traders should remain cautious. A spike in volume will be crucial to validate any retest of the 144 level.

*Image source: cTrader platform

Outlook and Trading Strategy

USD/JPY’s next move will likely be determined by the following technical levels and indicator shifts:

• 144.00 resistance line: A breakout with volume could trigger a rally toward 144.30–144.50.
• 143.30 support line: A break below may push the price down to 143.00 or even the 142.80 range.
• ADX above 0.20: A key threshold to confirm whether a trend is forming.

Example Trade Scenarios

Bullish Scenario (Breakout Play)
Entry: Long position after breakout above 144.00 with confirmed volume
Target: 144.30–144.50
Stop loss: Below 143.70

Bearish Scenario (Support Break Play)
Entry: Short position below 143.30
Target: 143.00–142.80
Stop loss: Above 143.60

Conclusion:

USD/JPY remains in a short-term range, but the convergence of MAs and movements in ADX and DMI indicate rising potential for a trend reversal. Whether it breaks above 144.00 or below 143.30 will define the next phase. Traders should monitor volume and ADX closely as the pair enters a phase where trend-following strategies may prove effective.

Disclaimer:

This article is for informational purposes only and does not constitute a recommendation to buy or sell any specific currency or financial instrument. Investment decisions should be made at your own discretion.
For the latest chart analysis and market updates, visit the FIXIO Blog to refine your trading strategies.