Elevated levels of volatility were observed in previous week, before closing above 159.200.
Lower volatility may be primary scenario, taking considering fundamental data releases from US and Japan.
USD/JPY hourly chart analysis
USD/JPY dropped sharply to around 157.58 on March 20, then quickly bounced back in a V-shaped recovery and is now hovering near 159.50, just below the key 160.00 level. The move back above the 50, 100, and 200 moving averages suggests the short-term trend has turned bullish, with those averages now acting as support around 159.00. Momentum is still positive, as shown by the RSI near 63, but it's getting close to overbought territory. That means the pair might slow down or move sideways before attempting another push higher.Hourly Chart
USD/JPY daily candle chart analysis
USD/JPY is still in a strong uptrend overall. Price is well above all the key moving averages, and they're lined up in a bullish order, which shows the longer-term momentum still favors the upside. Right now though, the pair is stuck around 160.00, which is a very important level. It already hit that area once, dropped, and has now come back to it again. That creates the risk of a double top, where failing to break higher could lead to a deeper pullback.
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Traders sentiment
Only about 27% of traders are long USD/JPY while roughly 73% are short, showing a strong bearish crowd bias. This contrarian setup supports further upside, especially if price breaks above 160.00 and triggers a short squeeze.