USDJPY 4H Bearish Trend
USDJPY 📶 Technical Analysis:
- Weekly (1W): Price is near its all-time high formed in 2024, with a bullish trend supported by moving averages (MAs).
- Daily (1D): While the price shows bearish movement since the start of 2025, MAs indicate an overall bullish trend. There's significant volatility on both the upside and downside due to strong support and resistance levels, as well as fundamental factors like interest rate expectations and other economic events.
- 4-Hour (4H): In January 2025, the price has formed a bearish trend, breaking two support levels at 156.5 and 155.0. On January 27, the price tested the 155 support level three times before breaking it with a strong candle. MAs on the 4H chart are also showing a bearish formation.
- Strategy: A potential short position is suggested if the price retests and confirms resistance at the broken support level of 155.0. Watch for the next key support around 152.0 if the price breaks below the current low of 153.7.
🆕 Fundamental Analysis:
- Fed Interest Rates Decision (Jan 29): No change expected in the federal funds rate, currently at 4.5%. The accompanying press conference will provide important guidance for future market expectations.
🔤 Trade Comment:
- A potential pending short order at 155.0 with a risk no more than 2%.
- JPY is strong against all major pairs on 27 Jan as JPY currency index has +0.85%
Note
âť— If the price breaks above 155.0 and tests 156.5, the bearish trend will be considered broken, as this would signal a potential fake breakout of the 155.0 support level. In that case, wait for a new, clear formation and trend direction before considering new positions.Note
âť— Jan 28
- The price has tested the resistance level at 155.0, with no pullback observed so far.
- On the 4H chart, we can see a strong bullish candle, indicating potential strength in the move.
- I'm currently waiting for price confirmation to determine the next course of action.
Note
🆕 Fundamental Analysis
🟢 Bank of Japan Core CPI (YoY)
- Actual: 1.9%
- Forecast: 1.7%
- Previous: 1.7%
Note
30 Jan
🆕 Fundamental Analysis
🟢 JPY - Bank of Japan (BoJ) Deputy Governor Ryozo Himino said on Thursday, the central bank “will raise rates if economy and prices move in line with forecast. The JPY remains supported by market expectations that the Bank of Japan (BoJ) will raise interest rates further by the end of 2025.
🟡 JPY - The BoJ is considering using economic data to guide future rate hikes.
🔴 US Federal Reserve (Fed): The Fed’s decision to keep rates steady and its cautious tone are supporting the US Dollar (USD), which may push the USD/JPY pair higher.
🟢 US Economic Uncertainty: Concerns over President Trump’s trade policies might hold back the JPY from rising too much.
🟢 US Treasury Yields: Falling US Treasury yields are making the USD weaker, which supports the JPY.
Trade active
📶 Technical Analysis:
🟡 False Breakout: On January 30, the price briefly broke above the 155.0 level but failed to hold, marking a false breakout.
🟢Breakdown: The price then dropped below the 155.0 support level, leading to the opening of a short position.
âś… Sell Position
- Open: 155.0
- SL: 156.0
- SL: -1.79%
- TP: 154.0 152.0
- TP: 3 - 5.42%
Trade closed manually
đź”´ The trade was manually closed on Friday as the weekend approached and the price showed signs of struggling to maintain strong momentum.
🟠The analysis didn’t confirm a clear bearish movement, which led to uncertainty regarding the continuation of the trend.
đźź To reduce risk, the position was closed with 0.00 profit, ensuring no exposure over the weekend when market conditions could be unpredictable.
Note
3 Feb
đź”´ The trendline was broken on Monday, February 3, driven by the strength of the USD.
đźź The price is showing signs of forming a double bottom, which is a potential indicator of a bullish reversal.
đźź Wait for clear trend reversal signals and a bullish formation to confirm a trend shift. Look for a break above resistance or a solid support bounce at the double bottom level for a potential long entry.
🟡 Since the USD strength is driving the price action, keep an eye on US economic data and other indicators that could affect the USD.
Note
🔤 Summary:
đź”´ The bearish analysis is now invalid, as the price reversed due to strong fundamental factors driving the market, particularly the USD strength.
🟢 The short position was closed at break-even, resulting in no profit or loss.
🟡 New analysis is required to evaluate the next potential trades, with a focus on bullish reversal signals and upcoming economic events that could impact the USD/JPY pair.
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