Forecast USDJPY This is not financial advice. Educational purpose only."
I am preparing to take a short position on USDJPY starting next week, in alignment with the upcoming rollover of futures contracts. My analysis is based on a combination of technical, macroeconomic, behavioral, and institutional elements.
From a technical perspective, a clear bearish reversal divergence is visible on the weekly chart using the 21-period RSI based on HLCC/4. While the price is making higher highs, momentum is weakening, indicating a loss of bullish strength. This setup is reinforced by a long-term continuation divergence that has been forming since the major tops of 1971, suggesting a possible terminal phase in the current cycle.
COT data supports this view. Large speculators have been steadily reducing their long positions on USDJPY over recent weeks. More significantly, these same institutional players have begun accumulating long positions on Japanese yen futures (6J), often a precursor to a monetary rotation. The upcoming rollover of futures contracts next week could trigger a more pronounced shift in institutiona positioning.
Macroeconomic data from the United States also confirms a slowdown. Core PCE came in at 0.1%, below expectations. Nonfarm Payrolls underperformed, and the ISM Services Index dropped below 50, signaling contraction. In contrast, Japan maintains stable inflation around 2.3%, which gives the Bank of Japan room to begin policy normalization. The yield differential is starting to narrow, a historically bearish factor for USDJPY.
Finally, market sentiment remains skewed. Retail traders are still heavily positioned long on USDJPY. Such imbalances, where retail crowds are long and institutional players are exiting, often precede sharp reversals.
If the expected institutional reallocation materializes after the futures rollover, I will enter a short position. Technical, fundamental, and cyclical factors are now fully aligned.
"This is a personal market view. Always do your own research before making trading decisions."
JPYUSD trade ideas
4H ORDER BLOCK UNMITIGATED STRATEGY📉 USDJPY – Short Bias Below Supply Zone (4H Mitigated OB Bearish)
Timeframe: 30m
Bias: Bearish
Type: Intraday / Swing Setup
📌 Key Observations:
Price recently tapped into a 4H Mitigated Order Block (OB) around 144.360 – 144.049 and showed rejection with strong bearish wicks.
This zone aligns with a previous supply area and is marked by confluence from the McGinley Dynamic 50 & 200 EMA.
A short was executed at 144.162, with a stop above the OB at 144.476.
Target is set at 142.500, near previous demand structure and liquidity sweep.
🧠 Trade Rationale:
The 4H bearish OB was mitigated during the Tokyo session with low momentum, followed by a London and NY session rejection.
The pair formed a lower high and is now trading below key moving averages, indicating a possible continuation to the downside.
Multiple sessions show rejection from the same OB area – reinforcing its strength.
Increased volume on the down candle confirms institutional presence.
🎯 Trade Details:
Entry: 144.162
Stop Loss: 144.476
Take Profit: 142.500
RRR: 5.9:1
Position Size: 228,000
Current PnL: +606.12 USD (Floating)
🔍 Next Steps:
Monitor for any signs of bullish order blocks forming around 143.200 or 142.900 as partial TP zones.
Move SL to breakeven once price breaks 143.400.
USDJPY 4-Hour Technical Analysis (Smart Money Concept Breakdown)📈 Overall Market Structure Overview:
The chart reflects a multi-phase Smart Money playbook, consisting of:
Bullish channel structure
Breakout followed by liquidity sweep
Supply zone flip to demand
Price mitigation and structure shift
Anticipated reaction zone for upcoming move
🔎 Phase-by-Phase Analysis:
🧱 1. Ascending Channel Formation
Price was moving upward in a controlled bullish ascending channel, suggesting institutional accumulation with planned distribution above highs.
The channel breakout was the first significant liquidity event, where early breakout traders were baited.
💧 2. Fakeout and Supply Interchange into Demand (Ellipse Zone)
Once the channel broke, price sharply reversed, retracing into a previous supply zone.
However, institutions defended this zone, flipping it into a demand area.
This behavior, marked with the blue ellipse, signals “Supply Interchange in Demand” – a core SMC concept.
Here, orders were absorbed
Liquidity was trapped below
A bullish push confirmed institutional intent
🎯 3. Previous Target Hit – Completion of Bullish Leg
Price made a strong rally from the demand zone, hitting the previous target near 147–148 zone.
This bullish leg created a Major Break of Structure (BOS) confirming bullish dominance at that phase.
⚠️ 4. Distribution Begins: Shift in Momentum
After reaching the Major BOS area, price failed to hold higher levels.
A decline followed, indicating distribution by smart money.
The reaction was sharp and consistent, creating lower highs, signaling weakness.
🔄 5. Minor CHoCH Formation – Early Reversal Signal
A Minor Change of Character (CHoCH) occurred around the 144.000–143.000 area.
This is a key transition, where smart money transitions from bullish intent to potential bearish delivery.
📦 6. Next Target Zone – Bullish POI (Point of Interest)
The chart identifies a next target demand zone around 141.800–141.200, marked in green.
This zone:
Holds unmitigated demand
Sits below a recent liquidity pool
Aligns with past support
This is where Smart Money could re-enter, offering a long opportunity if a bullish CHoCH or BOS forms from that zone.
📊 Trade Scenarios & Forecast:
🔻 Bearish Short-Term Play (Sell Setup):
If price respects current resistance (144.500–145), and a lower high forms:
Short entry opportunity
Target: 142.000–141.200 demand zone
Confirmation: Strong bearish candle, CHoCH below minor support
🔺 Bullish Reversal Play (Buy Setup):
At the demand zone:
Look for bullish reaction + CHoCH or BOS
Long entry potential
Target: Retest of 144.000 or even 147.000 if liquidity allows
🔐 Smart Money Tactics in Play:
Liquidity Engineering:
Price trapped both bulls (at highs) and bears (below ellipse zone)
Supply into Demand Flip:
A classic trap where supply becomes a launchpad for bullish delivery
Minor CHoCH:
Early signal of intent change
Next POI (Point of Interest):
Potential reaccumulation zone below major liquidity grab
🧠 Educational Takeaway:
This analysis illustrates:
Why breakouts are often traps without confirmation
How to identify real institutional zones
The role of CHoCH/BOS in planning ahead
Importance of waiting for price to come to your levels, not chasing
⚠️ Risk & Caution:
News catalysts can cause deviation from technical levels
Always use stop loss and proper risk management
SMC is about patience and precision, not prediction
✅ Summary:
USDJPY is showing early signs of a smart money distribution and a potential pullback toward demand.
Watch closely for confirmation at the key zone (141.800–141.200) before engaging long. Until then, short setups on rallies may be favorable.
USDJPY previous support, now resistance at 144.80The USDJPY pair is currently trading with a bearish bias, aligned with the broader downward trend. Recent price action shows a retest of the resistance zone, suggesting a temporary relief rally within the downtrend.
Key resistance is located at 144.80, a prior consolidation zone. This level will be critical in determining the next directional move.
A bearish rejection from 144.80 could confirm the resumption of the downtrend, targeting the next support levels at 142.90, followed by 142.30 and 141.20 over a longer timeframe.
Conversely, a decisive breakout and daily close above 144.80 would invalidate the current bearish setup, shifting sentiment to bullish and potentially triggering a move towards 145.45, then 146.30.
Conclusion:
The short-term outlook remains bearish unless the pair breaks and holds above 144.80. Traders should watch for price action signals around this key level to confirm direction. A rejection favours fresh downside continuation, while a breakout signals a potential trend reversal or deeper correction.
This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.
Quantitative Trading Models in Forex: A Deep DiveQuantitative Trading Models in Forex: A Deep Dive
Quantitative trading in forex harnesses advanced algorithms and statistical models to decode market dynamics, offering traders a sophisticated approach to currency trading. This article delves into the various quantitative trading models, their implementation, and their challenges, providing insights for traders looking to navigate the forex market with a data-driven approach.
Understanding Quantitative Trading in Forex
Quantitative trading, also known as quant trading, in the forex market involves using sophisticated quantitative trading systems that leverage complex mathematical and statistical methods to analyse market data and execute trades. These systems are designed to identify patterns, trends, and potential opportunities in currency movements that might be invisible to the naked eye.
At the heart of these systems are quantitative trading strategies and models, which are algorithmic procedures developed to determine market behaviour and make informed decisions. These strategies incorporate a variety of approaches, from historical data analysis to predictive modelling, which should ensure a comprehensive assessment of market dynamics. Notably, in quantitative trading, Python and similar data-oriented programming languages are often used to build models.
In essence, quantitative systems help decipher the intricate relationships between different currency pairs, economic indicators, and global events, potentially enabling traders to execute trades with higher precision and efficiency.
Key Types of Quantitative Models
Quantitative trading, spanning diverse markets such as forex, stocks, and cryptocurrencies*, utilises complex quantitative trading algorithms to make informed decisions. While it's prominently applied in quantitative stock trading, its principles and models are particularly significant in the forex market. These models are underpinned by quantitative analysis, derivative modelling, and trading strategies, which involve mathematical analysis of market movements and risk assessment to potentially optimise trading outcomes.
Trend Following Models
Trend-following systems are designed to identify and capitalise on market trends. Using historical price data, they may determine the direction and strength of market movements, helping traders to align themselves with the prevailing upward or downward trend. Indicators like the Average Directional Index or Parabolic SAR can assist in developing trend-following models.
Mean Reversion Models
Operating on the principle that prices eventually move back towards their mean or average, mean reversion systems look for overextended price movements in the forex market. Traders use mean reversion strategies to determine when a currency pair is likely to revert to its historical average.
High-Frequency Trading (HFT) Models
Involving the execution of a large number of orders at breakneck speeds, HFT models are used to capitalise on tiny price movements. They’re less about determining market direction and more about exploiting market inefficiencies at micro-level time frames.
Sentiment Analysis Models
These models analyse market sentiment data, such as news headlines, social media buzz, and economic reports, to gauge the market's mood. This information can be pivotal in defining short-term movements in the forex market, though this model is becoming increasingly popular for quantitative trading in crypto*.
Machine Learning Models
These systems continuously learn and adapt to new market data by incorporating AI and machine learning, identifying complex patterns and relationships that might elude traditional models. They are particularly adept at processing large volumes of data and making predictive analyses.
Hypothesis-Based Models
These models test specific hypotheses about market behaviour. For example, a theory might posit that certain economic indicators lead to predictable responses in currency markets. They’re then backtested and refined based on historical data to validate or refute the hypotheses.
Each model offers a unique lens through which forex traders can analyse the market, offering diverse approaches to tackle the complexities of currency trading.
Quantitative vs Algorithmic Trading
While quant and algorithmic trading are often used interchangeably and do overlap, there are notable differences between the two approaches.
Algorithmic Trading
Focus: Emphasises automating processes, often using technical indicators for decision-making.
Methodology: Relies on predefined rules based on historical data, often without the depth of quantitative analysis.
Execution: Prioritises automated execution of trades, often at high speed.
Application: Used widely for efficiency in executing repetitive, rule-based tasks.
Quantitative Trading
Focus: Utilises advanced mathematical and statistical models to determine market movements.
Methodology: Involves complex computations and data analysis and often incorporates economic theories.
Execution: May or may not automate trade execution; focuses on strategy formulation.
Application: Common in risk management and strategic trade planning.
Implementation and Challenges
Implementing quantitative models in forex begins with the development of a robust strategy involving the selection of appropriate models and algorithms. This phase includes rigorous backtesting against historical data to validate their effectiveness. Following this, traders often engage in forward testing in live market conditions to evaluate real-world performance.
Challenges in this realm are multifaceted. Key among them is the quality and relevance of the data used. Models can be rendered ineffective if based on inaccurate or outdated data. Overfitting remains a significant concern, where systems too closely tailored to historical data may fail to adapt to evolving market dynamics. Another challenge is the constant need to monitor and update models to keep pace with market changes, requiring a blend of technical expertise and market acumen.
The Bottom Line
In this deep dive into quantitative trading in forex, we've uncovered the potency of diverse models, each tailored to navigate the complex currency markets with precision. These strategies, rooted in data-driven analysis, may offer traders an edge in decision-making.
*Important: At FXOpen UK, Cryptocurrency trading via CFDs is only available to our Professional clients. They are not available for trading by Retail clients. To find out more information about how this may affect you, please get in touch with our team.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
USD/JPY💰Symbol: { USD/JPY }
🟩Price: { 144.790 & 145.856 }
🟥Stop: { 145.415 & 146.660 }
1️⃣profit: { 144.279 & 144.916 }
2️⃣profit: { 143.780 & 143.780 }
3️⃣profit: { 142.746 & 142.746 }
4️⃣profit: { 142.139 }
📊Check your chart before entering.
🚨Check before use to make sure there is no important news.🚨
Potential bearish drop?USD/JPY is reacting off the resistance level which is an overlap resistance and could drop from this level too ur take profit.
Entry: 143.79
Why we like it:
There is a pullback resistance level.
Stop loss: 144.52
Why we like it:
There is a pullback resistance that is slightly below the 61.8% Fibonacci retracement.
Take profit: 142.79
Why we like it:
There is a pullback support level.
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USD/JPY.2h chart patternI'm provided for USD/JPY on the 2-hour timeframe, here is a detailed breakdown and target analysis:
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🔍 Technical Analysis Summary
Pair: USD/JPY
Timeframe: 2H
Current Price: ~144.98
Trend: Bearish
Breakdown Confirmation: Price broke structure support and the ascending trendline.
Indicators: Price is below the Ichimoku cloud, confirming bearish momentum.
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🎯 Identified Targets (Based on Your Chart)
1st Target Level (Nearest Support Zone):
Price Level: Around 143.50
This is the first horizontal red line marked as a "Target" on your chart.
Likely to act as a short-term support level.
2nd Target Level (Major Support):
Price Level: Around 142.00
This is the second and lower red line marked on your chart.
Strong historical support zone based on previous consolidation.
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✅ Final Target Levels
Target # Price Level Description
Target 1 143.50 Initial support; take partial profit here
Target 2 142.00 Major target; potential reversal/support zone
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Would you like a suggested stop-loss level or entry refinement based on candlestick confirmation or indicators (like RSI or volume)?
Potential bullish continuation?USD/JPY has bounced off the pivot and could rise to the 1st resistance, which aligns with the 78.6% Fibonacci retracement.
Pivot: 143.37
1st Support: 142.78
1st Resistance: 144.50
Risk Warning:
Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
Disclaimer:
The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
USDJPY: Strong Bullish Price Action 🇺🇸🇯🇵
I see 2 strong bullish confirmation on USDJPY after a test of a key daily
support cluster.
The price violated a trend line of a falling channel and a neckline of
an inverted head & shoulders pattern with one single strong bullish candle.
The pair may rise more and reach 144.45 level soon.
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I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
Bullish bouncer off pullback support?USD/JPY is falling towards the pivot and could bounce to the 1st resistance which acts as a pullback resistance.
Pivot: 143.37
1st Support: 142.71
1st Resistance: 144.50
Risk Warning:
Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
Disclaimer:
The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
USD/JPY Trendline Now as ResistanceDespite the massive move of weakness in USD in Q2, USD/JPY has held up relatively well, especially over the past two months.
The 140.00 level held the lows in April and then it was the 142.50 level. The bullish trendline connecting those two points had some additional higher-low context.
But as looked at last week, the 145.00 zone was now set up as possible lower-high resistance and that last bounce from the trendline found sellers there, leading to a breach earlier this week.
Now that trendline is showing up as resistance potential. Notably bears were unable to stretch down for re-test of 142.50, and if we do end up with a larger short squeeze in the USD, the pair could become interesting on the long side again. For that, the 145.00 level remains key and buyers will first need to take that out to exhibit some element of control on a shorter-term basis. - js
Bullish bounce off pullback support?USD/JPY is falling towards the pivot and could bounce to the 1st resistance, which is a pullback resistance.
Pivot: 142.53
1st Support: 140.78
1st Resistance: 146.72
Risk Warning:
Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
Disclaimer:
The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
USDJPY 15M BULLS START TO SHOW THERE MUSCLES :))))As we can see we have been rejected @ a VERY STRONG SUPPORT AREA, and small time frame give us good BULLISH FORMATION (Creating LL/HL with DIVERGANCE)
Im looking to hold at list 1 lot, as i believe this could be a bottom for a START OF MASSIVE BULL RUN (ONLY TIME WILL TELL)
As usual will update everything here
Thanks
demand zone spotted... LET THE HUNTING BEGIN!!!📉 USD/JPY 4H Analysis – Demand Zone Revisit Expected
The pair is currently in a retracement phase after tapping into a higher-timeframe supply zone. Let's break down the structure and reasoning behind this setup:
1. Market Structure & Smart Money Footprints
• The chart begins with a clear Break of Structure (BOS) to the upside from a prior low, confirming a bullish shift.
• This upward move was supported by multiple Short-Term Supports (SS) that were respected throughout the bullish trend.
• Price has maintained a general uptrend structure, making higher lows and higher highs, but is now showing signs of a correction.
2. Supply and Demand Zones
• Supply Zone (147.288 – 148.000):
This is the last bearish zone before a sharp sell-off, indicating institutional selling pressure. Price tapped into this zone and has since reacted bearishly — a likely area where smart money took profits or initiated shorts.
• Demand Zone (139.740 – 140.728):
Marked from the origin of the bullish impulse and supported by a previous BOS, this is a critical area where institutional buying may resume. It also aligns with a liquidity sweep and previously unmitigated demand — a key confluence zone for potential longs.
3. Current Market Behavior
• Price is currently declining toward the demand zone, and based on structure, this is likely a healthy retracement.
• The chart suggests a buy limit setup at demand, with a tight stop just below 139.740 and a target near the previous supply reaction.
________________________________________
✅ Trade Idea
• Bias: Bullish from demand
• Entry: Around 140.728
• Stop Loss: Below 139.740
• Take Profit: 147.288 (just before the supply zone)
• Risk-to-Reward: Approx. 1:4
This setup assumes price will respect demand and continue the bullish structure, especially after multiple SS validations and a strong institutional reaction in the past.
🧠 Final Thoughts
This setup reflects classic Smart Money Concept principles:
• Structure shift via BOS
• Entry at unmitigated demand
• Exit just before major supply
• Strong confluence from price history and liquidity sweep zones
Wait for confirmation in the demand zone — a bullish engulfing, internal BOS, or FVG fill could give additional confidence to enter long.
NB: x represents previous liquidity sweep
$$ represents liquidity
bos represents break of structure
CHEERS TO WEALTH!!!