USDJPY Signals Bullish Reversal with Failed Low

Market Analysis – October 4

USDJPY has shown signs of a potential bullish reversal, confirmed by a failed low and a reattack on the area of interest (AOI). This indicates that the market is unwilling to dip further, signalling the possibility of upward movement.

USDJPY Key Levels

• Demand Zones: 140.800, 137.240, 133.740
• Supply Zones: 147.050, 149.210, 151.860

USDJPY Long-term Trend: Bullish

In September, USDJPY formed a swing low at 170.790. However, instead of continuing downward with a lower low, a higher low emerged, signalling weakening selling pressure. This higher low followed a test of the key point of interest (POI) at 144.000. The second visit to this POI resulted in a bullish break of structure (BOS) within the area of interest, further confirming the reversal.

The 9-period and 21-period Moving Averages have crossed, indicating a shift toward a bullish trend. Additionally, the Hull Butterfly indicator has turned positive, supporting the case for further bullish momentum. These technical indicators align with the market’s shift in sentiment, reinforcing the expectation of a bullish reversal.

USDJPY Short-term Trend: Bullish

Multiple tests of the area of interest typically weaken the zone, and the combination of Moving Averages and the Hull Butterfly Oscillator shows a strong upward trajectory on the 4-hour chart. If the bullish breakout continues, USDJPY could target the next supply level at 149.210, marking a significant upward move.