USDJPY Enters Correction Phase as Market Pauses at Demand Level

Market Analysis – August 21

USDJPY currently finds itself in a correction phase, following a pause in the recent price descent upon reaching the demand level at 142.660. The retracement has displayed lethargic price movement, characteristic of a market correction. Currently, price action is inching towards the supply zone at 151.940.

USDJPY Key Levels

Demand Levels: 146.480, 142.660, 140.000
Supply Levels: 151.940, 156.050, 160.000

USDJPY Long-Term Trend: Bearish

For the first half of the year, daily candles remained above the midline of the Bollinger Bands, indicating a bullish trend. However, the break of this bullish trendline in July marked a shift. Since then, all daily candles have consistently closed below the midline of the Bollinger Bands, signalling a dominant bearish trend.

The recent decline paused at the demand level of 142.660, where the Stochastic indicator revealed an oversold condition. This pause has transitioned into a correction phase, with price attempts to ascend being resisted by the moving average strand that runs between the Bollinger Bands.

USDJPY Short-Term Trend: Bearish

On the four-hour chart, the reason for the stalled ascent becomes clearer. Price movement has encountered a bearish order block acting as a resistance. This blockage is already delaying the rise towards the higher timeframe resistance zone at 151.940. If the bearish order block holds, USDJPY may continue its bearish trend without reaching the higher timeframe supply zone.

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