USDJPY Price Decline Erases Previous Bullish Trend

Market Analysis – September 14

USDJPY’s most recent bullish trend, which spanned over six months and achieved a remarkable 13.40% gain, has been swiftly wiped out. In less than three months, the price decline has retraced the entire range of the prior uptrend. The Volume indicator reveals increased trading activity during this rapid downturn, signaling strong bearish participation.

USDJPY Key Levels

• Demand Levels: 142.00, 137.00, 134.00
• Supply Levels: 151.90, 155.40, 160.30

USDJPY Long-Term Trend: Bearish

The first half of the year saw USDJPY moving in an upward trajectory, with a steady bullish trendline guiding its ascent. However, the reversal has been striking, as the bearish delivery outpaced the previous bullish momentum. The volume of trading peaked during August and September, a clear indication of intensified selling pressure. This bearish dominance signals a potential continuation of the downtrend, as market participants have driven the pair lower with increasing conviction.

Since mid-July, the Smoothed Heikin Ashi candles have maintained a consistent red hue, confirming the sustained bearish sentiment. Despite occasional bullish retracements, the overall trend has remained firmly downward. The Hull Butterfly Oscillator also supports this view, with the daily chart displaying strong bearish momentum.

USDJPY Short-Term Trend: Bearish

The short-term outlook mirrors the daily trend, with bearish pressure dominating both timeframes. This well-established downtrend presents valuable opportunities for traders, as sound trends like these tend to offer a higher win rate and more reliable forex signals. Under the current conditions, price action suggests a likely move toward the next demand zone at 137.00, especially as Smoothed Heikin Ashi candles continue to indicate bearish control.

With both long-term and short-term trends favouring the downside, USDJPY remains firmly in bearish territory. Traders can capitalize on this momentum by targeting key demand zones, and optimizing their strategies to generate the best forex signals.

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