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USD/JPY Sinks Below Key Support Amid Bearish Trends: EUR/USD and GBP/USD Set for Potential Moves

February 21, 2025
Smart Money

Forex Market Update: USD/JPY Declines as Key Resistance Levels Form in Major Pairs

The foreign exchange market is witnessing significant fluctuations as the US Dollar (USD) faces strong downward momentum against the Japanese Yen (JPY). The latest trading session has seen USD/JPY decline substantially, falling below critical support levels. Meanwhile, other currency pairs such as EUR/USD and GBP/USD are showing potential upward movement as they navigate through resistance levels.

USD/JPY Analysis: Bearish Trend Takes Hold

The US Dollar has commenced a notable decline against the Japanese Yen, having started from levels above 154.00. In recent trading, USD/JPY has plummeted below the 152.50 and 151.50 support levels, reflecting the growing bearish sentiment among traders.

As noted on the 4-hour chart, the pair has settled way below significant benchmarks, including the 150.50 support and the 100 simple moving average (SMA), which is reflected in red on the chart. Furthermore, it has dipped beneath the 200 SMA (illustrated in green), indicating a bearish trend. The exchange rate even fell below the psychologically important 150.00 level, revealing numerous bearish signals.

Support and Resistance Levels

Immediate support for USD/JPY now appears at the 149.20 level, with critical support further down at 148.80. The primary support level is established at 148.00. Should the downward trajectory continue, the pair could test even lower levels around 145.00. Conversely, on the upside, USD/JPY is facing considerable resistance around the 150.50 mark, with the next significant resistance level at 151.20. A bearish trend line is currently forming with a resistance point at 151.25, further complicating recovery efforts. The key resistance zone remains near 151.50; a conclusive move above this threshold could revitalize bullish sentiment, potentially pushing the pair beyond the 152.50 resistance.

EUR/USD: Eyeing Gains

In contrast to USD/JPY, the Euro to US Dollar (EUR/USD) pair has remained stable above the 1.0450 level, indicating resilience in the face of dollar strength. The pair is aiming to break above the 1.0520 resistance zone, which, if achieved, could signal a more substantial upward move.

GBP/USD Trends: Potential for Advancement

The British Pound (GBP) against the US Dollar (GBP/USD) is also showing signs of potential upward movement. Analysts suggest that the pair might attempt to push toward the 1.2750 level soon, a move that would demonstrate growing confidence in the pound amidst shifting market dynamics.

Upcoming Economic Indicators

Market participants are poised for significant economic data releases. Upcoming economic events to watch include:

  • Euro Zone Manufacturing PMI for February 2025 (Preliminary): Forecasted at 47.0, compared to a previous reading of 46.6.
  • Euro Zone Services PMI for February 2025 (Preliminary): Expected at 51.5, slightly above the previous figure of 51.3.
  • US Manufacturing PMI for February 2025 (Preliminary): Projected at 51.5, an increase from the previous 51.2.
  • US Services PMI for February 2025 (Preliminary): Anticipated to rise to 53.0 from 52.9. These economic indicators will likely influence trading sentiment and could lead to further volatility in the forex market.

Conclusion

As the forex market adapts to changing economic data and trends, traders must stay vigilant regarding support and resistance levels. The current bearish trend of USD/JPY paired with potential upward movements in EUR/USD and GBP/USD creates a landscape filled with opportunities and challenges. Investors and traders are advised to monitor these developments closely as they strategize their next moves in the forex arena.

For traders seeking to navigate these dynamics, Titan FX offers cutting-edge platform technologies, deep liquidity, and competitive spreads, ensuring that clients can make informed trading decisions in this fast-paced environment.