USDJPY Crashes Lower as Price Heads Into Discount Zone

USDJPY crashes lower as the price heads into the discount zone. The current state of the market indicates a corrective stage, descending as it nullifies feeble troughs. In accordance with the MA Cross, the bears have effectively seized control over the market. Nevertheless, given the persistently positive overall order flow, the downward momentum may cease once the discounted region is attained.

Demand Zones: 144.90, 127.20

Supply Zones: 151.90, 160.40

Immediately after the year’s low formed at 127.20, the overall trend of the price flipped bullish. Without much resistance, the initial phase of the rally took up its course until the price hit 138.00. The first notable resistance encountered at 138.00 led the price of the US dollar to 130.00 Japanese yen. Apparently, the bulls had taken control of the market, as the bears barely made a significant correction to the downside. The inability of USDJPY to sink lower beyond the 127.20 low indicated a structural shift to the upside.

Owing to the depletion of the selling pressure, USDJPY clearly expanded to the upside. At 144.90, the market was already overbought, according to the RSI (Relative Strength Index). The subsequent fall ended as the price validated the Breaker Block at around 138.00. The market resumed its upward trend afterwards, barely making a notable retracement on the daily chart. However, the buying pressure depleted as the price hit the major resistance at 151.90.

The market’s four-hour chart displays a bearish trend in its order flow. This comes in the wake of the Change of Character (CHoCH) observed on November 20, 2023. The current downward spiral is anticipated to persist until the Relative Strength Index (RSI) signals an oversold condition within the discount zone.

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