USD/JPY Forecast: Manufacturing PMI Drops, Technical Analysis & Key Levels

USD/JPY Forecast & Technical Analysis

Meanwhile, Japan’s Manufacturing PMI fell from 50.1 to 48.9 in July, indicating renewed contraction in the sector. Service sector PMI data is due tomorrow at 8:30 AM JST (7:30 PM ET, previous day), and is expected to print around 53.3, highlighting the relative strength of non-manufacturing industries.

Japanese corporate profits may come under pressure this year due to export taxes, which could trigger revisions to capital expenditure plans. However, business leaders remain reluctant to raise prices for finished goods, concerned about potential declines in demand and shipment volumes.

On the US side, recent July labor market data remains a drag on the dollar: the unemployment rate edged up from 4.1% to 4.2%, while nonfarm payrolls came in at 77,000 (vs. 106,000 expected), with June’s print revised down sharply to 14,000 from 147,000. Healthcare saw the largest job gains (+55,000), while government jobs declined by 12,000. Average hourly earnings met forecasts at +0.3% m/m and accelerated to 3.9% y/y (vs. 3.8% expected). Last Friday, President Trump dismissed Bureau of Labor Statistics head Erica McEntarfer, alleging data manipulation after the weak jobs report, fueling concerns about possible White House interference in statistical agencies.

Support and Resistance Levels

USD/JPY remains in a new uptrend: after reaching a five-month high near 150.90 last week, the pair corrected down to 147.60 (the 38.2% Fibonacci retracement), supported by the middle Bollinger Band. The current price action suggests a potential bounce toward 149.60 (50.0% Fibonacci), 151.65 (61.8% Fibonacci), and 154.70.

Technical indicators confirm the possibility of renewed growth: Bollinger Bands are sloping upward, MACD is steady in positive territory, though Stochastic has turned down from overbought — signaling a potential corrective pullback toward 145.00 (23.6% Fibonacci and lower channel support). However, a full trend reversal appears unlikely at this stage.

• Resistance: 147.15, 149.60, 151.65, 154.70
• Support: 145.00, 140.88

USD/JPY technical analysis: key levels

USD/JPY Trading Scenarios and Forecast (Forex Technical Analysis)

• Main scenario (Buy Stop):
  Entry: 148.30
  Take Profits: 149.60, 151.65, 154.70
  Stop Loss: 147.25
  Time frame: Weekly (5–7 days)
• Alternative scenario (Buy Limit):
  Entry: 145.00
  Take Profits: 149.60, 151.65, 154.70
  Stop Loss: 144.00
• Key Levels: 140.88, 145.00, 147.15, 149.60, 151.65, 154.70

Outlook

The pair’s recovery from the 147.60 area could accelerate if US macro data or upcoming service PMI from Japan surprises positively. However, a break below 145.00 would signal a deeper correction, with 140.88 as the next major support. As the BoJ sticks with a hawkish bias and the US dollar reacts to mixed economic data and political tensions, volatility in USD/JPY is likely to remain elevated in the coming sessions.