USD/JPY Eyes Breakout as DAX Tests Key Resistance Levels

USD/JPY is consolidating near recent highs around 156.50, showing potential for a bullish breakout as the pair maintains strength above the 156.00 support level. The yen remains under pressure from the Bank of Japan's ultra-loose monetary policy stance, contrasting sharply with the Federal Reserve's higher-for-longer interest rate outlook. Technical indicators suggest building momentum, with the pair testing the upper boundary of its recent trading range. Meanwhile, the German DAX index is approaching critical resistance at 21,000 points, supported by improving European economic sentiment and corporate earnings. A successful break above this level could signal further equity market strength, potentially weakening safe-haven demand for the yen. Traders should monitor the 157.00 psychological level for USD/JPY as the next major resistance, while 155.50 serves as key support. The correlation between risk-on equity markets and yen weakness remains a crucial factor for both trades.