FX.co ★ USD/JPY

i see the USD/JPY, I believe the pair has entered a critical phase where bearish momentum is clearly dominating the market. The recent price action shows an aggressive sell-off that erased several weeks of bullish gains within only a few trading sessions. In my opinion, this is not simply a normal correction inside an uptrend; instead, it reflects a significant shift in market sentiment that deserves close attention The most obvious feature on the chart is the strong bearish impulse from the recent highs around the 164.00 area. Sellers stepped in with remarkable strength, producing consecutive large bearish candles and pushing the pair toward the 156.50 region. Such a rapid decline usually indicates that institutional traders are reducing long exposure while short-term participants are aggressively following the downside momentum. From a technical perspective, the pair has broken below several important support levels that had previously acted as buying zones during the long-term rally. Once those supports failed, they quickly turned into potential resistance levels. In my view, any recovery toward these broken levels could attract fresh selling pressure rather than signal the beginning of a new bullish trend Looking at the Relative Strength Index (RSI), the indicator is trading close to the oversold region, hovering near the 20 level. While many traders automatically interpret an oversold RSI as a buying opportunity, I personally prefer to be cautious. Strong bearish trends can keep momentum indicators in oversold territory for an extended period before any meaningful reversal develops. Therefore, I would not rely on the RSI alone to justify entering long positions. The MACD also reinforces the bearish outlook. The histogram has expanded sharply into negative territory, while the MACD line continues to move below the signal line. This combination reflects increasing downside momentum rather than signs of stabilization. Until the histogram begins to shrink and a bullish crossover appears, I believe sellers still have the technical advantage Another aspect that catches my attention is the psychology behind the current move. The previous rally attracted many late buyers near the highs, and the sharp reversal likely forced a wave of stop-loss orders to be triggered. This kind of liquidation often accelerates selling pressure and can extend declines beyond what many traders initially expect. If buyers manage to defend the current support area around 156.00–156.50, we could eventually see a technical rebound toward the nearest resistance zones. However, I would currently view such a recovery as a corrective move unless price succeeds in reclaiming and holding above the broken resistance levels with strong bullish confirmation On the downside, failure to stabilize around current prices could expose the pair to another leg lower. The speed of the recent decline suggests that volatility may remain elevated, meaning traders should be prepared for wide daily ranges and sudden price swings. From my personal trading perspective, I remain cautiously bearish on USD/JPY in the near term. Although a short-term bounce cannot be ruled out because of the oversold RSI reading, I believe the overall technical structure still favors the sellers. Before considering any medium-term buying opportunities, I would prefer to see clear evidence of accumulation, improving momentum indicators, and a confirmed bullish price pattern. Until those signals appear, I think selling rallies rather than chasing rebounds remains the more reasonable strategy based on the current daily chart.