Hello traders! Let's analyze the current situation with the "major" USD/JPY pair. After a strong V-shaped recovery from the lows around 158.200, the pair has shown impressive strength, but right now we are at a very delicate moment. Technical picture and Price Action: Despite the visually strong growth, the algorithm still maintains a No Trend Identified status. This is an important signal: the market is in a phase of sharp priority shifts, and a stable trend structure has not yet been formed. Breaking through all barriers: Bulls surged through the central Pivot level (158.695) and consistently broke through all three resistance levels (R1, R2, and R3). Current disposition: The quote at the moment is 159.528. The price has exceeded the upper boundary of the TMA channel. Historically, such "breakouts" beyond the channel end in a return to its middle line in 90% of cases. Resistance zone: We are closely approaching the psychological level of 159.60–159.80. Note that pink rejection markers popped up at previous local peaks (downward arrows). Basement indicator readings: Critical overheating. At the bottom of the chart, we see a picture that should make buyers extremely cautious: Value 1.00: Both the SuperTrend histogram and the linear oscillator have reached the absolute maximum (1.00). Analysis: Colleagues, this is a state of "maximum overheating." When indicators stick to the ceiling, it indicates a colossal bullish impulse, but at the same time, it suggests that the potential for a pullback-free rise is almost exhausted. Buying at such levels means entering the market at the peak before a possible correction. Trading plan and recommendations: The market is extremely overbought, so it is wiser to wait for the price to "exhale." Bearish scenario (Correction): Considering the oscillator at the 1.00 mark and the breakout beyond the channel boundaries, the most likely scenario is a technical pullback. The target of this move will be a retest from top to bottom of the broken Resistance 3 level (159.433) or a deeper dive to Resistance 2 (159.151). Bullish scenario (Continuation): For those who want to continue buying, a safe option would be to wait for a correction to the levels of 159.15–159.20 and only enter positions aiming for 160.00 after the basement indicators unload (dropping at least to 0.50). USD/JPY looks very strong, but technically the pair is "gasping for air." A value of 1.00 on the oscillators is a serious reason to lock in some profits on longs and refrain from opening new positions right away. Wishing everyone a profitable session and a clear mind!
