USDJPY  Experiences a Significant Bearish Retracement

USDJPY has exhibited a dynamic interplay between bullish and bearish trends, oscillating between the 162.370 supply level and the 142.050 demand level over a significant period. This article provides a detailed analysis of the price movements, highlighting key trends, retracements, and momentum shifts while offering insights into the long-term and short-term market outlook.

Demand Levels: 149.320, 146.200, 142.050

Supply Levels: 153.830, 158.240, 162.370

The long-term trend for USDJPY remains bullish, anchored by the major low formed in mid-September 2024. At this juncture, the price rejected the 142.050 demand level, marking the commencement of a robust bullish trend. The initial bullish wave was characterized by a substantial upward movement, breaching the 153.830 supply level. However, this upward momentum was met with a significant bearish retracement, underscoring the market’s inherent volatility.

Subsequently, the price found support at the 149.320 demand level, reigniting bullish momentum. This second wave of bullish activity propelled the price beyond the 153.830 supply level, reaching a high of 158.240. At this level, the price encountered resistance, leading to another bearish retracement. Despite this, the overall bullish trend remains intact, as evidenced by the formation of higher highs and the sustained defence of the 149.320 demand level.

In the short term, the USDJPY pair has exhibited a bearish trend, beginning at the 158.240 supply level. This period saw a structural shift in market dynamics, with the price transitioning from a bullish to a bearish trend. The creation of lower lows during this phase further consolidated the bearish outlook. Recently, the price has been on a bearish leg, rejecting a 4-hour order block. This rejection has reinforced the ongoing bearish forex signals. 

It is crucial to contextualize the Bearish trend within the broader market framework. The higher timeframe context remains bullish, and the 149.320 demand level continues to hold, suggesting that the current bearish trend may be a significant retracement rather than a reversal.