USDJPY Heads Lower as Price Leaves the Premium Zone

USDJPY Analysis: December 29

USDJPY heads lower as the price leaves the premium zone. At the premium zone, the long-term bullish trend just came to an end. After the price reached the resistance level of 151.900, something happened. A downward breakthrough started on November 20, 2023, invalidating the prior lows in the process. The negative trend resumed after the most recent rally at the bearish order block at 145.100.

USDJPY Key Levels

Demand Zones: 137.200, 127.200
Supply Zones: 145.100 151.900

USDJPY Long-Term Trend: Bullish

The USDJPY pair is exhibiting a bearish trend, signaling a downward trajectory as it departs from the premium zone. This premium zone, characterized by higher valuations, has seen a reversal in sentiment. Technical indicators, including the MA Cross and the MACD (Moving Average Convergence Divergence) align with the bearish outlook, indicating a potential shift in market dynamics.

Moreover, the deviation from the premium zone implies a reassessment of risk tolerance and market attitude. It was at the 151.900 resistance level that the US dollar started to lose strength against the Japanese yen. After the recent bottom into the 151.900 supply zone was invalidated, the trend changed to the negative. Prior to the reversal being confirmed, a bullish order block was invalidated.

USDJPY Short-Term Trend: Bearish

The four-hour chart is clearly bearish as price keeps breaking the market structure to the downside. A recent return from the 145.100 supply zone led to the ongoing crash. Traders expect USDJPY to keep heading lower until it reaches the 137.200 support.

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