USDJPY Experiences a Bearish Reversal

The recent bullish trend has come to an end as price action confirms a shift into a bearish trend. After a significant rally from mid-September 2024 to January 2025, the market reached a pivotal point, leading to a bearish reversal. This shift was confirmed by a breach of the previous trendline support, indicating a loss of bullish momentum and the emergence of a new downward trend.

Demand Levels: 149.400, 145.280, 140,680

Supply Levels: 156.650, 162.049, 166.500

The prior bullish trend made an attempt to establish a foothold above the 156.650 demand level, suggesting potential for continued upward movement. However, price failed to sustain its bullish momentum and eventually broke below the key trendline support. This decisive move signaled a bearish reversal, reinforcing a broader downtrend.

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A key technical confirmation of this bearish shift is the daily Relative Strength Index (RSI), which reflects a significant decline in price strength. The weakening RSI underscores the growing selling pressure, supporting the expectation of further downside movement. Price is now approaching the 149.400 demand level, where a breach could further extend the bearish trend. A successful breakdown of this level may open the door for continued declines, reinforcing the broader downward forex signal.

In the short term, the price has experienced a decisive bearish break of structure, leading to an intense decline. This downward move has developed without any significant pullbacks, leaving a Fair Value Gap (FVG) that may be filled at a later stage. The daily RSI is approaching oversold territory, suggesting that selling pressure may be reaching exhaustion. This increases the possibility of a corrective bullish move in the near term. Furthermore, the 4-hour RSI is already indicating oversold conditions, reinforcing the potential for a short-term bullish retracement. If buying momentum begins to emerge, the price could attempt to correct some of the recent losses before determining the next directional bias.

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