USD/JPY Bears Eye Key 141.60 Support as Options Signal Rising Downside Risks
Technical Analysis:
USD/JPY drifted lower on Tuesday, briefly touching a session low at 142.00 amid soft U.S. economic data, including weaker-than-expected April consumer confidence and a disappointing March JOLT job openings report. Although the pair quickly bounced back due to month-end dollar buying and thin market liquidity, technical indicators and option market positioning are increasingly signaling rising bearish pressure. One-week risk reversals have notably shifted in favor of puts, reaching 2%, underscoring traders’ growing appetite for downside protection ahead of significant event risks, including this week’s Bank of Japan (BOJ) policy meeting and Friday’s U.S. non-farm payrolls release.
Technically, USD/JPY remains confined within its well-established 142.00–144.00 range. However, short-term momentum is leaning bearish, particularly given the bearish seasonal tendency for the pair that historically emerges in early May. Immediate and crucial technical support sits at the recent daily lows near 141.54–141.60. A decisive break below this support zone would trigger a more meaningful bearish move, potentially accelerating declines toward psychological and technical targets at 140.00, a major round number that aligns with longer-term support zones from earlier in the year.
On the upside, the pair continues to face significant resistance at the April 9–10 lows near 144.00. A clear break above this level would be required to neutralize short-term bearish momentum and signal a possible bullish reversal. Further above, strong technical resistance is observed at 144.55–144.60, marking the highs of April 4 and April 11. Given current market conditions—characterized by thin liquidity, cautious positioning ahead of upcoming event risks, and strong bearish sentiment reflected in leveraged positioning—USD/JPY bears hold the short-term advantage, with options markets indicating continued volatility and downside potential.