Forex Market Analysis: USDJPY Key Resistance in View

Author: John J. Hardy, Global Head of Macro Strategy

Date: March 6, 2026

Market Overview

The forex market is currently experiencing volatility, with the USDJPY pair testing significant resistance levels around 158.00. This comes amid increasing pressure on the Japanese yen due to rising global yields and energy prices. The market remains cautious as traders await the US jobs report, which could influence market sentiment.

Key Developments

• The USDJPY is approaching key resistance levels, with potential resistance extending to 160.00 and beyond.
• Market sentiment is heavily influenced by the ongoing conflict in Iran, particularly concerning the Strait of Hormuz, a critical shipping route for oil.
• Recent data indicates a strong performance in the US services sector, but the overall employment situation remains stable yet sluggish.
• Higher US treasury yields and energy prices are exerting downward pressure on the yen and euro, while potentially supporting the US equity market.

Technical Analysis

Traders are observing the USDJPY's movement closely, particularly around the 158.00 resistance level. The Ichimoku chart analysis shows that bearish signals have been removed, indicating a potential for further upward movement unless significant selling pressure emerges. Resistance levels are noted at 158.00, 159.00, and the psychological barrier of 160.00, with a major high of 161.95 from 2024 looming above.

Market Sentiment and Positioning

Current market positioning reflects a mean reversion, with the US dollar regaining strength after a period of weakness. The Australian dollar's bullish trend has also been moderated, while the Canadian dollar has strengthened due to rising oil prices. The overall sentiment remains cautious, particularly in Europe, as traders remain alert to developments in the Middle East.

Conclusion

As the market navigates through geopolitical tensions and economic data releases, the USDJPY's performance will be closely watched. The interplay between rising yields, energy prices, and the ongoing conflict in Iran will be critical in determining the direction of the yen and broader market sentiment.