4-hr USD/JPY: The Dollar Could Drop Another 300 pipsThe US Dollar remains in a clear downtrend against the Japanese Yen. Despite a sharp 500-pip rally ten days ago, the bullish attempt failed to shift the overall bearish momentum, and sellers have regained control. A significant technical development occurred as a Death Cross, a well-known bearish signal, emerged precisely when USD/JPY was retesting a strong multi-bottom support around 151.20.
Following this, oversold conditions attracted short-term buyers, leading to a temporary 100-pip rebound. However, this recovery quickly lost steam and failed to break above the key 38% Fibonacci retracement, which has historically acted as a strong resistance level. With price rejecting this area, the downtrend appears to remain intact, and we expect further declines in the near term.
Given these signals, we favor entering a short position, anticipating a decisive break below the multiple bottom support at 151.20. If this level gives way, it could trigger an extended sell-off, potentially driving the pair lower toward the 148.50 region. Our strategy remains focused on aligning with the dominant bearish trend while leveraging key technical levels to optimize entry and exit points.
