I am analyzing the USD/JPY pair starting from the H4 timeframe, where I see that the price has remained in sell territory throughout the day due to the Ichimoku Cloud maintaining a bearish structure with both boundaries positioned above price. I note that the bearish engulfing pattern is still valid, reinforcing short-term selling pressure. I observe that price has tested the 154.34 support level twice, which tells me that this level is currently critical for determining the next directional move. I believe that if this support is not broken, the market may attempt a corrective move upward toward the 157.88 area, potentially forming a double-bottom structure. I also recognize that a clear break below 154.34 would confirm continuation of the downtrend, with the next major selling target located near 151.55. I understand that for the market to re-enter buy territory, price must first reclaim 155.80, which would also imply a bullish breakout above the upper boundary of the Ichimoku Cloud. I see that the CCI indicator on H4 is still in the oversold zone but is beginning to flatten and slightly turn upward, suggesting a weak rebound rather than a trend reversal. I notice that this indecision in momentum aligns with the sideways behavior of price. I plan to consider short entries after a corrective pullback toward the resistance zone around 155.88, as I believe this would offer a more favorable risk-to-reward ratio. I intend to protect such positions with a stop-loss above the critical high near 155.38. I also acknowledge the possibility that price could continue declining directly from the 154.65 area toward the daily buyer zone around 153.51, where I would reassess market behavior for either a breakout continuation or a rebound setup. I conclude from the EMA 13–50 alignment that the short-term trend remains bearish, and I therefore prioritize sell-side scenarios in this timeframe.
I am expanding my analysis to the daily and hourly timeframes to better understand the broader market context and refine my trading strategy. I see that the current price around 154.72 is approaching the lower moving average, which I interpret as a dynamic support zone that could serve as a base for a corrective rebound. I believe the market may enter a prolonged consolidation phase, forming a conical or triangular sideways structure that could persist for several weeks. I expect that such compression would eventually lead to a strong volatility expansion. I anticipate that once this consolidation resolves, the dominant global uptrend could resume, potentially breaking above the 157.39 resistance and extending further north. I observe that on the monthly structure, October showed strong bullish momentum, November stabilized, and December has produced modest corrective movement without invalidating the broader uptrend. I see that the longer-term wave structure remains bullish, supported by the MACD staying above its signal line in the buy zone. I attribute much of this resilience to the overall strength of the US dollar against major currencies. I recall that in September, a descending wedge reversal pattern broke to the upside, followed by a classic retest and continuation move. I note that the price rebounded strongly from the 149.96 support zone and resumed its upward trajectory. I recognize that although sellers attempted to defend a long-term descending resistance line, price eventually broke through and continued higher toward the 200 Fibonacci extension. I understand that USD/JPY has a historical tendency to trend persistently, even during corrective phases. I acknowledge that recent pullbacks, including the reaction to the Fed’s interest rate decision, appear corrective rather than trend-changing. I am currently monitoring the potential formation of a downward wedge, and I believe a recovery above the EMA200 near 154.80 would signal renewed bullish intent. I remain cautious ahead of the Bank of Japan announcement, as yen demand could temporarily pressure the pair lower toward 153.70. I conclude that while short-term uncertainty remains, I am not actively looking to sell aggressively and instead remain focused on identifying conditions for trend continuation.
