Saad Ullah
The U.S. Dollar has been gaining ground against the Japanese Yen, with the USD/JPY pair reaching 154.01 as of October 31, 2025. This upward movement comes on the heels of a Golden Cross formation—a technical pattern that traders often interpret as the beginning of a sustained uptrend. The dollar has also pushed through a descending trendline that had kept rallies in check since mid-2024, suggesting a possible shift in the balance between the two currencies.
USD/JPY Breaks Through Year-Long Resistance
The pair's climb into the 154 range represents a meaningful change in market dynamics. According to Barchart analyst observations, the move above a downward-sloping trendline that had held since 2024 marks the first time in roughly 18 months that buyers have managed to overtake this resistance.
The Golden Cross—where the 50-day moving average crosses above the 200-day—adds technical credibility to the bullish case. This pattern has historically preceded extended rallies in the pair. The recent bounce from the 149-150 support area shows solid buying interest at lower levels, indicating that traders may now be treating this zone as a reliable base for future price action.
Technical Picture
The chart reveals several important developments. The breach of the descending resistance line confirms that the consolidation phase has given way to renewed strength. The Golden Cross formation between the key moving averages has traditionally led to multi-month advances in USD/JPY. Important support sits at 149-150, which needs to hold for the uptrend to remain intact, while potential targets lie at 156 and 160:
- Trendline breakthrough: Price action has decisively cleared the long-term descending resistance
- Moving average alignment: The 50-day has crossed above the 200-day, historically a bullish signal
- Support structure: The 149-150 zone provides a foundation for further gains
- Upside targets: Near-term resistance levels appear at 156 and 160
The chart's highlighted area shows the critical moment when prices broke above the downtrend line—a development that traders had been watching closely throughout late 2025.
What's Driving the Dollar Higher
The yen's weakness reflects the growing policy gap between the Federal Reserve and the Bank of Japan. While the Fed maintains higher interest rates to keep inflation under control, the BoJ continues its yield-curve control policy and ultra-low rates. This difference makes dollar-denominated assets more attractive and encourages capital flows into U.S. markets. Recent U.S. economic data—particularly GDP growth and employment figures—have reinforced confidence in the dollar's strength. Meanwhile, Japan's inflation numbers have come in below expectations, reducing the chances of the BoJ tightening policy anytime soon.
What's Next for USD/JPY
If the dollar holds above 154, the next logical targets would be 156, followed by the psychologically significant 160 level. That said, the possibility of Bank of Japan intervention remains a risk factor. Japanese authorities have intervened before when the yen weakened too rapidly, and they could do so again. For now, though, the combination of the Golden Cross and the break above long-term resistance suggests the pair may continue moving higher through year-end, supported by favorable macro conditions for the dollar.
Saad Ullah
