USD/JPY Forecast 2026-09-25: SMC Analysis & Key Liquidity Zones
Welcome to today's daily market breakdown for the USD/JPY pair. As of September 25, 2026, the USD/JPY is trading around the 158.80 level, showing a firm bullish trend in the near term following recent macroeconomic shifts. With the Federal Reserve's recent rate adjustments and the Bank of Japan's ongoing policy stance, the pair continues to offer high-probability setups for traders utilizing Smart Money Concepts (SMC) and ICT methodologies. In this article, we will break down the higher timeframe (HTF) bias, key liquidity pools, and actionable scenarios for both the London and New York sessions.
HTF Bias & Market Structure
From a higher timeframe perspective, the USD/JPY remains structurally bullish. The daily chart indicates that the pair has successfully rebounded from lower support zones and is currently navigating through premium pricing areas. The recent price action has created a series of higher highs and higher lows, confirming the bullish market structure.
Institutional order flow suggests that smart money is accumulating positions at discount arrays, specifically targeting buy-side liquidity resting above the 159.30 and 160.25 levels. However, traders must remain cautious of potential retracements into fair value gaps (FVGs) left behind during the recent impulsive moves.
Key Levels to Watch
To effectively navigate today's price action, we must identify the critical institutional reference points:
* Resistance / Buy-Side Liquidity (BSL): 159.34 (Near-term target), 160.26 (Major liquidity pool)
* Support / Sell-Side Liquidity (SSL): 157.50 (Prior swing low), 156.37 (50-Day SMA dynamic support)
* Key Order Block (OB): A bullish order block is present on the 4-hour chart around the 157.80 - 158.00 region.
* Fair Value Gap (FVG): An untested FVG exists on the 1-hour timeframe between 158.20 and 158.40, which may act as a magnet for price before continuation.
Bullish Scenario
For the bullish scenario to play out, we want to see price retrace into the 1-hour FVG (158.20 - 158.40) during the London session. A displacement higher from this zone, accompanied by a market structure shift (MSS) on the 15-minute chart, would provide a high-probability long entry.
Entry: 158.35 (upon lower timeframe confirmation)
Stop Loss: 157.90 (below the 4H Order Block)
Take Profit 1: 159.34 (Near-term BSL)
Take Profit 2: 160.25 (Extended target)
Bearish Scenario
While the HTF bias is bullish, a bearish retracement could occur if the market fails to break above the 159.30 resistance during the New York session. If price sweeps the buy-side liquidity at 159.34 and immediately rejects with strong displacement downwards, it could signal a short-term reversal to mitigate lower FVGs.
Entry: 159.25 (after a liquidity sweep and 5m MSS)
Stop Loss: 159.60
Take Profit 1: 158.40 (Top of the 1H FVG)
Take Profit 2: 157.50 (Prior swing low)
Economic Calendar This Week
Traders must stay aware of high-impact news that can inject volatility into the market. This week, key events include:
* US CB Consumer Confidence: Can impact USD strength and overall risk sentiment.
* US Core PCE Price Index: A critical inflation gauge for the Fed, heavily influencing USD/JPY.
* US Prelim GDP: Will provide insights into the broader economic health of the US.
Ensure you manage risk appropriately around these data releases, as spreads can widen and slippage may occur.
FAQ
What is the current trend for USD/JPY?
The current higher timeframe trend for USD/JPY is bullish, with price action targeting buy-side liquidity above 159.30.
How do I trade the FVG in SMC?
In SMC, a Fair Value Gap (FVG) is used as a point of interest (POI). Traders wait for price to retrace into the FVG and look for lower timeframe confirmation (like a market structure shift) before entering a trade in the direction of the HTF trend.
Risk Disclaimer
*Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment. The analysis provided here is for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results.*
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