USDJPY: Bullish Recovery Targets 160.30 and 162.60

In this technical analysis, Ultima Markets examines the developing bullish structure in USDJPY, with both the daily and 4-hour charts pointing to further recovery potential toward 160.30 and the higher 162.60 target.

Technical Analysis of USDJPY

USDJPY Daily Chart Insight

(USDJPY Daily Chart, Source: Ultima Markets MT5)

On the daily chart, USDJPY has staged a strong recovery after finding demand near the 153.00 area. The rebound has pushed price through the descending trendline drawn from the July high, marking an important change in the short-term market structure.

Price is now trading back around 158.20 and, importantly, above all three lines of the Williams Alligator. The indicator is also beginning to turn bullish: the faster Lips and Teeth have risen sharply, while the slower Jaw is starting to curl higher after previously pointing down. The lines are gradually separating again after converging during the correction, suggesting that bullish momentum is rebuilding.

The Alligator has not yet developed into a fully established bullish expansion, but the current configuration supports the recovery rather than contradicting it. Continued price acceptance above the indicator would add further confirmation that buyers are regaining control.

The next major hurdle is 159.00. A sustained move above this level would strengthen the breakout structure and expose 160.30, an important horizontal resistance area visible on the daily chart.

Above 160.30, the technical picture becomes particularly interesting. The sharp July decline left a sizeable fair value gap between approximately 161.10 and 162.95. With price recovering underneath this imbalance, the gap represents a natural area of interest should bullish momentum continue. The 162.60 level sits inside this zone and remains the main higher-timeframe upside target.

Recent daily candles also show a clear change in behaviour around the September bottom. After the aggressive selloff, buyers repeatedly rejected lower prices and produced a strong sequence of bullish candles from the lows. Rather than seeing immediate follow-through from sellers, USDJPY has continued to build higher from that base, reinforcing the view that the recovery still has room to develop.

Key Levels:

• Support 1 (157.40–157.60): Immediate support around the rising moving-average cluster and the recent consolidation area.
• Support 2 (156.50–156.80): The next support zone formed during the latest recovery structure.
• Resistance 1 (159.00): The first major hurdle for buyers and the level required to confirm further upside continuation.
• Resistance 2 (160.30): A key horizontal resistance level and the next objective above 159.00.
• Resistance 3 (162.60): The main higher-timeframe target located inside the daily fair value gap.

USDJPY 4-Hour Chart Analysis

The 4-hour chart provides additional confirmation of the improving bullish structure.

The most important development is that USDJPY has reclaimed the 200-period moving average and is currently trading above it. The 200-MA had previously acted as dynamic resistance during the decline, but its slope has now flattened around the 157.50 area. This loss of downward momentum, combined with price holding above the average, suggests that the previous bearish pressure is fading.

Price action around the 200-MA is also constructive. During the latest pullback, USDJPY briefly moved below the average but was met by aggressive buying. One of the candles formed a pronounced lower shadow, creating a hammer-like bullish rejection from the 156.50–157.00 region. Buyers subsequently pushed price back above the 200-MA, showing that lower prices were not accepted for long.

This makes the area around 157.40–157.60 especially important. As long as price continues to hold above the 200-MA and this nearby support zone, the short-term bias remains tilted to the upside.

The immediate resistance remains 159.00, where the previous H4 rally stalled. A clean breakout above this level would produce a fresh higher high and confirm that buyers are ready to extend the recovery.

The next objective would then be 160.30. A sustained break above 160.30 would align the H4 structure with the broader daily setup and open the way toward the daily fair value gap, with 162.60 becoming the principal upside target.

(USDJPY 4-Hour Chart, Source: Ultima Markets MT5)

USDJPY Bullish Scenario

The technical picture across both timeframes is increasingly aligned. The daily chart has broken its descending structure, price is trading above the Williams Alligator as the indicator begins to turn higher, and the 4-hour chart has reclaimed a flattening 200-MA following a clear bullish rejection from lower levels.

A sustained break above 159.00 would provide the next confirmation and expose 160.30. If buyers manage to clear that barrier as well, USDJPY could extend into the daily fair value gap, bringing 162.60 into focus.

Bullish targets: 159.00 → 160.30 → 162.60.