Dollar/Yen (USD/JPY) Is Bouncing But Chart Breakdown Likely Coming

The US Dollar/Japanese Yen (USD/JPY) has experienced considerable price swings. In 2024, the pair traded from a low near ¥140 to a high of ¥162, before returning to ¥140 and subsequently climbing toward ¥158. Volatility has remained elevated in 2025, marked by a decline back to the ¥140 support zone within the year's first four months.

Currently, USD/JPY is testing this crucial ¥140 level again. Technical analysis principles suggest that support levels often weaken after multiple tests. A common observation is that while a level might hold for the first three attempts, the probability of a breakdown increases significantly on the fourth test. Based on recent price action, the ¥140 level is facing this critical fourth test.

A sustained move below ¥140 would represent a significant bearish technical event, signaling a potential major shift in favor of the Yen against the Dollar. This weakening could be linked to broader macroeconomic factors, such as the US economy entering a recession or a continued decline in the Dollar's global safe-haven status, recently impacted by trade disputes and policy uncertainties.

Consequently, while short-term rebounds cannot be ruled out, the technical picture suggests a growing risk of an eventual breakdown below the key ¥140 support for USD/JPY.