FX.co ★ USD/JPY

USD/JPY 4H Technical Analysis The previous analysis favored the continuation of the bullish structure as long as price respected the rising trendline and held above the BOS area, while I also mentioned that upside momentum could remain intact until price reached the major RESISTANCE. The current 4H chart shows that this scenario has almost completed as USD/JPY is now trading around 161.96 after extending steadily from the BOS+RBS ZONE near 160.60. Price has respected the ascending trendline throughout the recent rally, producing consecutive higher highs and higher lows, confirming that buyers have remained in control. However, I can now see that price has reached the marked RESISTANCE where BOS 4H is printed, and candles are beginning to compress instead of expanding aggressively. This usually reflects slowing bullish momentum even though no confirmed bearish reversal has appeared yet. Volume also does not show aggressive buying compared with the impulsive move from the BOS area, suggesting that buying pressure is gradually fading near resistance. I believe liquidity is now building above the current highs, making this area attractive before any meaningful reaction develops. If price manages to close decisively above 162.00 with sustained momentum, buyers could continue extending the move. Otherwise, repeated rejection around this resistance would increase the probability of profit-taking. The trend technically remains bullish because the ascending trendline is still valid, but I would avoid chasing fresh longs directly into resistance because the risk-to-reward has become less attractive compared with earlier entries from the BOS+RBS ZONE.

I now expect the market to focus on the TL LIQ shown on the chart once the current resistance has been tested. My preferred expectation remains that price could briefly sweep liquidity above the current highs before reversing toward the marked BUYING ZONE. The projected path on the chart suggests a gradual decline toward the OB+FVG between approximately 160.20 and 160.41, where I would expect buyers to become active again if bullish market structure remains intact. This zone also aligns closely with the previous BOS area, making it a logical location for demand to re-enter the market. I would monitor price action carefully once it reaches this region because a strong bullish reaction could provide continuation toward fresh highs later. However, if sellers generate a decisive breakdown below the BUYING ZONE, then the current bullish structure would weaken significantly and a deeper correction could develop. From a fundamental perspective, traders will also remain sensitive to expectations surrounding BoJ policy normalization, Fed interest rate outlook, U.S. inflation data, Treasury yields, and broader geopolitical developments, as these factors continue influencing JPY and USD flows. Overall, I remain cautiously bullish in the bigger picture, but after such an extended rally into RESISTANCE, I believe a liquidity sweep followed by a retracement into the OB+FVG and BUYING ZONE remains the higher-probability scenario before the next sustainable bullish continuation.