USD/JPY 4-Hour Time Frame AnalysisUSD/JPY 4-Hour Time Frame Analysis
On the 1-hour timeframe, USD/JPY is in a downtrend, consistently forming lower highs (LH) and lower lows (LL). Recently, price retested the minor resistance at 150.500 before breaking below the key support level at 149.450, signaling increased bearish momentum.
Following the breakout, price retraced upwards, likely targeting sellers' stop-losses placed above 149.450. This retracement indicates a liquidity grab, as market makers aim to trap retail traders anticipating a trend reversal.
Currently, the price is positioned within a liquidity zone. If further bearish pressure emerges, we expect the downtrend to continue. Our strategy is to wait for a 4-hour candle to close below the 149.450 level for confirmation. Upon this confirmation, we will place a sell limit order at 149.380, aligning with our risk parameters.
Sell Limit Entry: 149.380 (below key level)
Stop Loss (SL): 150.290 (above liquidity)
Take Profit (TP): 147.360 (next minor key support)
Key Levels:
Minor Resistance: 150.500
Minor Support: 149.450 (previously broken)
This plan aims to capitalize on the continuation of the bearish structure while maintaining disciplined risk management.
Fundamental Analysis:
Recent statements from billionaire investor Steve Cohen suggest a bearish outlook on the US economy. Speaking at the Future Investment Initiative Institute's summit in Miami Beach (source: Bloomberg), Cohen highlighted several macroeconomic headwinds that could negatively impact the USD:
Slowing US Economic Growth:
Cohen predicts US GDP growth will decline to 1.5% in the second half of the year, down from 2.5%.
Impact of Tariffs and Immigration Laws:
New tariffs and tighter immigration policies under President Trump's administration are expected to weigh heavily on economic growth.
Tariffs cannot be positive. It’s a tax, Cohen stated, warning that a potential tit-for-tat tariff war could further drag the economy down.
Government Cost-Cutting:
Elon Musk's leadership of the Department of Government Efficiency is pushing austerity measures, which Cohen described as a further headwind for growth.
Cohen also indicated a bearish market outlook, expressing concerns about a significant market correction in the near term.
Political Unrest and Its Impact on USD:
In addition to economic concerns, there is widespread political unrest across the United States. Throughout February, protests erupted nationwide, particularly in opposition to mass deportations and other administration policies. On February 5, a coordinated movement called "50 protests, 50 states, one day" saw large demonstrations outside state capitol buildings (source: Bloomberg). Such social and political instability could further erode investor confidence in the USD.
Conclusion:
Given the combination of technical patterns and fundamental pressures, the USD/JPY pair is likely to experience further downward movement:
Technical Confirmation:
If the price breaks and closes below 149.450 on the 4-hour chart, it will provide a strong bearish signal.
Fundamental Factors:
Slowing economic growth,
Tariff-induced trade friction, and
Political unrest under President Trump's administration contribute to a weaker USD outlook.
Based on these factors, our sell bias is supported by both market structure and economic fundamentals. We aim to execute our sell order at 149.380, targeting a downward move toward 147.360, while managing risk with a stop loss at 150.290.
📌 Disclaimer:
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading involves risk, and you should conduct your own research before making any investment decisions. Past performance does not guarantee future results.
