USD/JPY Daily Edge Report – December 23, 2025 

USD/JPY Daily Edge Report – December 23, 2025

📊 Pair: USD/JPY 📅 Date: December 23, 2025

Current Price and Trend Snapshot 📈

• Current Level: ~156.50–157.50 (trading around 157 mid-session, post-BOJ volatility).
• Recent Move: Upside resumption (+1–2% post-BOJ hike), dollar strength on carry revival despite expected hike; highs near 157.80.
• Key Support/Resistance:
  • Support: 155.00–154.50 (recent lows), 153.00 deeper
  • Resistance: 157.90–158.00 (multi-month highs), 161.00 extension
• Overall Technical Trend: Daily/Weekly bias bullish (long-term uptrend intact above 50-week SMA); carry flows dominate, higher highs despite short-term corrections.

Technical Analysis Overview 🔍

• Major Levels: Ascending channel from 2025 lows; key resistance cluster 157.90–158.00. Support zone 154.50–155.00.
• Potential Setups:
  • Setup #1 (Liquidity Sweep → BOS → Reclaim): Sweep below 155.00 then reclaim for bullish continuation (A+ if clean).
  • Setup #2 (Compression → Expansion): Coiling near 158.00 resistance – breakout potential on carry unwind reversal.
  • Setup #3 (Extreme Mean Reversion): Not triggered; recent 20-day ADR ~120–150 pips (moderate, no 2–3x extremes in holiday thin trade).
• H4/Daily structure favors bulls; wait for London/NY confirmation in low vol.

Retail Sentiment from Twitter/X and Social Media 🐑 Recent X discussions sparse (holiday period), mostly promotional signals; trader chatter mixed – some selling on intervention fears, others buying carry. Limited extremes; crowds neutral – watch for retail short buildup as contrarian bullish signal.

Retail Sentiment from Sources 📉

• Myfxbook: ~66% short / 34% long (retail heavily short at higher levels) → strong contrarian bullish implication (fade retail shorts if structure holds).
• OANDA/IG/FXSSI: Holiday-affected data sparse; typically retail positioned against yen strength – no confirmed extremes, but historical short bias supports fade.

Professional/Institutional Sentiment 🏦

• Bloomberg/FXStreet/Traders: Mixed short-term (post-BOJ dovish signals weaken yen); longer-term USD supportive on yield differentials.
• Bank Reports (JPM/Goldman): Forecasts lower USD/JPY into 140s by mid-2026 (yen strength on narrowing divergence); near-term carry favors USD bulls. Overall institutional bias mildly bearish longer-term, bullish short-term carry.

Most Recent COT Report 📑

• Latest: Early December 2025 (delayed).
• Speculators (non-commercial): Increasing net-shorts on JPY (bullish USD/JPY as specs bet against yen).
• Changes: Rising shorts/reduced longs recent weeks → supportive for USD strength.
• Implications: Specs aligning with carry trade revival; contrarian watch if extremes build.

Fundamental Drivers 🌍

• Key Themes: BOJ hiked to 0.75% (30-year high) but dovish Ueda signals limit yen gains; wide US-Japan yield spreads revive carry trades. Fed steady/hawkish vs. BOJ gradual hikes – divergence narrows slowly.
• Upcoming Events (Dec 23): USD data (CB Consumer Confidence, New Home Sales, Durable Goods); softer → USD weak (yen bullish); stronger → carry boost. Late JPY: BOJ Minutes (dovish tone expected). Holiday thin liquidity amplifies moves.

Overall Market Bias and Trading Ideas ⚖️

• Synthesized Bias: Mildly Bullish (carry revival + retail shorts + HTF uptrend); neutral short-term on holidays/low vol. Fade retail shorts if technicals align higher.
• Potential Setups (H4/Daily only):
  • Preferred: Bullish Continuation (Setup #2) – Expansion above 158.00 compression. Entry ~158.10; Stop below 157.00; Targets 161.00 (1:3 RR), 165.00+ (1:5+ A+ on volume).
  • Alternative: Reclaim after dip to 155.00 liquidity (Setup #1) – Entry reclaim ~155.50; Targets same. Risk small – perfection over noise.
  • Risks: Dovish BOJ Minutes or strong USD data miss → drop to 154.50 (monitor reversion). No force; asymmetry essential in thin markets.

Stay calm, objective – liquidity + structure only. Patience for high-probability in holiday ranges.