USDJPY is stalling on its recently drop, as price is forming reversal candlesticks around an area of interest visible on its daily time frame.

Price is finding support at the 38.2% Fibonacci retracement level around 153.65 and might be due for a bounce back to the swing high at 162.00 if support holds. A larger pullback could reach the 50% Fib at the 151.00 major psychological mark near the 200 SMA dynamic support or the 61.8% level closer to the rising trend line that’s been holding since April 2023.

On the subject of moving averages, the 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that support is more likely to hold than to break. Stochastic is also in the oversold region to reflect exhaustion among sellers, so turning higher would confirm that bullish momentum is returning.

RSI also seems to be bottoming out around the oversold region and has plenty of room to climb before reflecting exhaustion among buyers.

USDJPY is likely to take cues from the BOJ decision, as the central bank is being pressured to provide a timeline on their plans to hike interest rates further. After all, Japanese officials seem keen to prevent further yen depreciation, so talk of tightening could translate to more gains for the currency.

However, the FOMC decision could also steal the show later in the day, as the Fed is widely expected to sit on its hands while suggesting that a September hike may be more likely. Downplaying the odds of easing could bring upside for the US dollar, though, especially if the NFP report later in the week comes in stronger than expected once again.

With that, leading US jobs indicators could also impact USDJPY behavior in the next few days, as traders attempt to adjust positions ahead of these key events.