TA Daily Alert: USD/JPY Signals Possible Bullish Momentum Reversal

The latest MACD crossover in USD/JPY indicates a possible shift bullish impulseeven though price action has stalled near recent highs.

Traders watching this pair may see this as the first sign that buyers are trying to regain control.

Is this bullish MACD crossover in USD/JPY a true bullish continuation signal, or is it a potential bullish trap near key resistance levels?

How price reacts to nearby resistance levels will be key to assessing the strength of this development.

A strong break and hold above the resistance level will bring the uptrend back into focus, while a rejection could drag the pair back to the lower support zones.

So far, it’s a classic a “wait and see” moment.where the price action, not just the indicator, will decide the next move.

Welcome to TA Alert of the Day. Every day after the market closes, MarketMilk looks for alerts on popular technical indicators. We use these warnings as the basis for a mini-lesson, breaking down what each warning means, why it’s important, and how traders can interpret it. The goal is to help novice traders not only notice these warnings, but also understand their logic and how they can inform trading decisions.

What MarketMilk found

At market close today, MarketMilk found that The MACD line has crossed its signal linemoving from 0.396874 vs 0.399934 on the previous bar to 0.404602 vs 0.400868 on the last close.

This bullish crossover comes after USD/JPY rallied from around 150.00-152.00 in early October to the mid-150s and recently retested the 156.80-157.20 area.

The price is currently consolidating just below the recent swing high near 157.70 from 2025-12-18, indicating a pause in the broader uptrend rather than a clear reversal.

What does it signal

Traditionally, a MACD line crossing its signal line is seen as a cattle impulse of ki.

This indicates that the short-term bullish momentum is starting to overtake the longer-term average, which may attract traders looking for a continuation of the existing uptrend.

In the current context, this cross around 156.80, just below the resistance around 157.70 and above the recent support in the 155.20-155.90 area, often signals an attempt by buyers to go one more leg higher if this move persists.

However, this same pattern may also reflect a brief uptick in momentum during a broader loss of steam. MACD crossovers near previous resistance, such as the 157.70 high from mid-December, sometimes coincide with bullish traps, where prices briefly push or move higher before returning to the recent range.

If USD/JPY does not hold higher nearby support levels such as 156.00–156.20 after this signal, the crossover may turn out to be a short-term shock rather than the start of a larger movement.

The result strongly depends on:

• How price behaves around the nearest support/resistance cluster (156.00–157.70).
• Maintaining interest in the purchase after the crossover.
• Confirmation from higher timeframes and related markets, such as broader USD indicators and JPY risk-sentiment dynamics.

How it works

MACD (Moving Average Convergence Divergence) is a momentum indicator constructed from the difference between two exponential moving averages (usually a 12-period and a 26-period EMA).

The MACD line is the difference, while the Signal line is usually the 9-period EMA of the MACD line itself.

A bullish crossover occurs when the MACD line moves above the signal line, indicating that recent price growth is accelerating compared to the previous average pace.

Important: MACD is a lagging indicator derived from moving averages, so reversals often occur after the initial price movement has already begun. In volatile or range markets, such as the sideways stretches seen in USD/JPY around 155.00-156.00 in December, the MACD can generate several false crossovers (whipsaw). Context and confirmation from price structure, higher timeframe trends, and other tools are important before acting solely on this signal.

What to pay attention to before acting

Don’t think that this MACD crossover automatically means a continuation of the bullish trend. Consider the following factors:

• Confirmation of the price action – Does USD/JPY break and hold above recent resistance around 157.00-157.70, or does it stall and return to the 156.00-156.20 area?
• The context of the trend – Is the broader trend (eg on the daily and weekly charts) still clear to the upside, with higher highs and higher lows, or is the momentum flattening out after a sustained rally from the 150.00-152.00 region?
• Supportive behavior – Does the price match the recent support zones around 155.20-155.90 on pullbacks, indicating that buyers are protecting the dips after the crossover?
• Alignment of higher timeframes – On the weekly timeframe, does the MACD or other trend indicators support a continuation of the narrative, or are they showing signs of exhaustion or divergence?
• Potential discrepancies – Is the MACD making higher highs while price fails to make new highs above 157.70, which could indicate a weakening of the breakout despite a bullish crossover?
• Volatility conditions – Has volatility compressed around the 156.50-157.00 range, indicating a potential breakout, or are the wide swings indicating volatile conditions that could exaggerate false signals?
• Fundamentals of the US dollar – Do upcoming US data releases (eg inflation, jobs, Fed comments) further strengthen the USD, or could they shift expectations and weigh on USD/JPY?
• JPY and BOJ policy background – Do the BOJ comments or yield changes hint at some kind of shift towards tighter policy or higher domestic yields that could support the JPY and counter the USD/JPY bullish signal?
• Cross assets and sense of risk – Is global risk sentiment in risk-on mode (often pressuring the JPY as a safe haven) or risk-on (which could support the JPY and limit the USD/JPY rally)?
• Coincidence with other indicators – Are the moving averages, RSI or key trend lines converging with this MACD signal to create a stronger technical confluence or is the MACD acting in isolation?

Risk considerations

⚠️ Whipsaw risk in ranges. USD/JPY has shown sideways behavior around the mid-150s during December, and MACD crossovers can quickly reverse in such conditions, leading to frequent false positives.

⚠️ The risk of giving up resistance. The pair is trading below a recent swing high near 157.70; failure to clear or hold this area after a crossover can turn a bullish setup into a sharp pullback.

⚠️ The risk of lagging the indicator. Since MACD is based on moving averages, by the time a crossover occurs, much of the immediate move may have already occurred, distorting the reward/risk ratio when price is close to resistance.

⚠️ Event and headline risk. USD/JPY is highly sensitive to central bank comments, yield changes and macro data; sudden news can cancel technical signals and cause gaps or spikes against the MACD indicator.

⚠️ Excessive dependence on one signal. Acting solely on a single MACD crossover without considering the broader market structure, positioning, and correlation can increase the likelihood of misunderstanding market intent.

Potential next steps

You can keep USD/JPY on your watch list, monitor how the price behaves around the support band 156.00-156.20 and the resistance zone 157.00-157.70 in the sessions following this intersection.

For those planning to take action, waiting for additional confirmation, such as a sustained break above resistance, a favorable weekly structure, or aligned signals from other indicators can help filter out potential breakouts.

Regardless of the approach, position size, well-defined stops around recent swing highs/lows, and awareness of upcoming economic and political events are important to managing risk around this MACD-based bullish signal.