USD/JPY Rebounds Toward 158 as Buyers Face a Tougher Test

USD/JPY is trading around 157.88 after recovering from recent lows, with short-term momentum showing some signs of improvement. Still, the broader setup remains cautious as the pair continues to trade below its major moving averages.

The rebound has taken USD/JPY back above the broken rising trend line around 157.72, while the 23.6% Fibonacci level at 157.30 is also holding as support. That gives buyers some breathing room, but the recovery still needs confirmation.

The first obstacle comes at 158.58, the 38.2% Fibonacci retracement. A move through this level would strengthen the rebound, but the more important test sits around 159.60–159.85, where the 50% retracement meets the 100-period SMA.

That 159.60–159.85 zone could decide whether this is a real recovery or just a short-term bounce. If buyers can break and hold above it, the pair could turn higher toward 160.64.

Above that, resistance becomes heavier. The 61.8% retracement at 160.64, the 200-period SMA at 161.78, and the 78.6% level around 162.12 form a broad supply zone that could make further gains harder to sustain.

The downside picture is equally important. 157.72 is the first level to defend, while a break below 157.30 would weaken the current recovery and put the deeper Fibonacci support near 155.23 back on the radar.

For now, USD/JPY is caught between improving short-term momentum and a much heavier resistance structure above. A break above 159.85 would shift the near-term bias higher; failure there could leave the pair vulnerable to another move lower.