FPG USDJPY Market Report July 31, 2026

On the M30 timeframe, USDJPY experienced a significant price decline before entering a recovery phase. As illustrated on the chart, the pair dropped sharply from around 163.73 to 157.93 within a very short period. Following the steep sell-off, USDJPY rebounded and began forming a moderate bullish reversal. The pair is currently trading around 160.50, with volatility remaining elevated as the recovery progresses. Recent price action indicates that buyers are gradually regaining control, allowing USDJPY to establish higher lows while attempting to extend its rebound.

From a technical perspective, USDJPY is showing improving bullish momentum following its recent correction. Bollinger Bands are beginning to expand again, suggesting increasing market volatility as price recovers. The latest Parabolic SAR dots remain positioned below the candles, confirming that short-term bullish momentum remains intact. Meanwhile, the Stochastic Oscillator has moved into overbought territory, with readings around 94.10 and 93.03, indicating strong upside momentum while also suggesting potential short-term consolidation. Bulls Power has returned to positive territory at approximately 0.59, reflecting strengthening buying pressure as bullish momentum gradually improves.

USDJPY declined sharply after the Federal Reserve maintained interest rates while providing a less hawkish policy outlook, putting pressure on the U.S. dollar and narrowing the U.S.–Japan yield differential. Meanwhile, the Bank of Japan maintained its policy rate at 1.00% while continuing to signal gradual policy normalization. Additional yen support came from renewed speculation of potential Ministry of Finance intervention. These developments triggered a broad unwinding of USDJPY long positions, accelerating the pair’s bearish correction. Despite the sharp decline, USDJPY has started to recover technically as bargain buying and position adjustments emerge ahead of the BOJ Quarterly Outlook Report, Governor Ueda’s speech, and upcoming U.S. economic data releases.

Technical Market Overview
1. Current Position: USDJPY is currently trading around 160.50, extending its rebound after recovering from the recent low at 157.93. The short-term market structure has shifted moderately bullish as price continues to form higher lows following the correction.
2. Resistance Zone: The nearest resistance is located at 163.20, followed by 163.73, with major resistance around 163.94. A sustained breakout above these levels would further strengthen the recovery momentum and improve the bullish outlook.
3. Support Zone: Immediate support is identified at 157.93, representing the recent swing low that triggered the current rebound. Holding above this level would help maintain the short-term recovery structure.
4. Indicator Observation: Bollinger Bands are beginning to widen, indicating increasing market volatility. Parabolic SAR remains below the candles, confirming ongoing bullish momentum. The Stochastic Oscillator is trading around 94.10 and 93.03, reflecting strong upside momentum but also signaling overbought conditions. Meanwhile, Bulls Power has turned positive at approximately 0.59, indicating strengthening buying pressure.
5. Technical Summary: USDJPY is undergoing a technical recovery following a sharp bearish correction, supported by bullish Parabolic SAR signals and improving Bulls Power momentum. However, elevated Stochastic readings suggest that the pair may experience short-term consolidation before attempting further upside movement.

Market Performance:
Forex             Last Price        % Change
EUR/USD       1.1516               −0.10%
GBP/USD       1.3455              −0.07%

Key Economic Calendar:
JP: Unemployment Rate
JP: Industrial Production MoM (Preliminary)
JP: Retail Sales YoY
JP: BoJ Gov Ueda Speech
CN: NBS Manufacturing & Non Manufacturing PMI
AU: PPI QoQ
JP: BoJ Interest Rate Decision
JP: BoJ Quarterly Outlook Report
JP: Housing Starts YoY
UK: Nationwide Housing Prices MoM & YoY
DE: Unemployed Persons
DE: Unemployment Change & Rate
EU: Core Inflation Rate YoY (Flash)
EU: Inflation Rate MoM & YoY (Flash)
US: Employment Cost – Benefits QoQ
US: Employment Cost – Wages QoQ
US: Employment Cost Index QoQ
CA: GDP MoM & GDP MoM (Preliminary)
US: Chicago PMI
US: Michigan Consumer Sentiment Final