Below is a structured, professional top-down analysis of USD/JPY, incorporating the key technical elements from weekly down to the 1-hour timeframe, as well as brief macro considerations. All references to specific price levels, indicators, and potential trade setups are included for clarity.
Weekly Timeframe
• Ascending Channel
• USD/JPY has been trading within a broader ascending channel. After briefly breaking below on July 29, price re-entered this channel around October 7 and continues to respect it.
• The overall structure has consistently formed higher highs and higher lows, though price is currently at a lower high within the channel.
• EMAs & Bollinger Bands
• The 20, 50, 100 EMAs on the weekly chart slope upward and are stacked in a bullish configuration, indicating a larger uptrend.
• Price remains in the upper Bollinger band, reflecting underlying strength; however, the bands are widening, implying potential for increased volatility.
• Momentum & Capital Flows
• RSI is above 50 but is currently testing its RSI-based moving average as well as an RSI trendline. A break below could signal deeper weekly correction, although the broader trend remains bullish.
• MACD is above zero and bullish but shows signs of weakening momentum near the top.
• CMF (Chaikin Money Flow) remains positive, suggesting steady capital inflows despite the recent consolidation.
• Macro Context
• The interest rate differential favors the U.S. dollar unless the Bank of Japan unexpectedly raises rates (e.g., on October 23). Even with a potential BOJ hike, the overall USD yield advantage may persist unless there is a significant policy shift.
Weekly Conclusion
The higher timeframe bias is bullish. However, the pair appears to be in a corrective phase (wave 4) within that broader trend, potentially setting up a wave 5 push that could break prior highs, pending confirmation on lower timeframes.
Daily Timeframe
• Rising Wedge / Channel
• On the daily chart, USD/JPY has formed a rising wedge-like structure. Price is currently near 155, with potential downside toward 154 if selling pressure continues.
• A cluster of support is found around the lower channel boundary, the 100 EMA, and various Fibonacci retracement levels (0.382 and 0.5).
• EMAs & Bollinger Bands
• The daily 20, 50, and 100 EMAs remain upward sloping, consistent with a larger bullish bias.
• Price has dipped below the 20 EMA, finding intermittent support at the 50 EMA. A decisive reclaim of the 20 EMA could drive a retest of upper channel resistance. Failure to do so may open further downside toward the 100 EMA.
• Currently trading near the lower Bollinger band, indicating near-term weakness on the daily timeframe.
• Ichimoku
• Price remains well above a thick Ichimoku Cloud, suggesting strong long-term support. However, there may be room for further downside before interacting with the Cloud.
• Momentum Indicators
• RSI sits below 50, indicating a short-term bearish tone.
• MACD is in a bearish phase, aligning with the current pullback.
• CMF remains positive but is starting to decline, hinting that outflows may briefly exceed inflows.
Daily Conclusion
The daily structure is still within a larger bullish trend but is undergoing a corrective pullback. A deeper move to the lower boundary of the rising wedge or channel (and possibly the 0.5 Fibonacci retracement) is plausible before resuming the broader uptrend.
4-Hour Timeframe
• Bearish Sub-Structure & Order Blocks
• After rejecting near 156, price has formed a short-term downtrend channel/structure on the 4H. A clear order block around 154.427 aligns with the lower portion of this channel.
• A bounce from that zone could complete the corrective phase before resuming the daily uptrend.
• EMAs & Momentum
• Price is oscillating around the 200 EMA on the 4H chart. Recent attempts to break below were quickly reversed, but so far, the short-term trend remains bearish.
• RSI is below 50, confirming a short-term downward bias.
• MACD shows waning bullish momentum, consistent with further downside risk toward support levels.
• Potential Short Setup
• A retest of the 156 region (daily order block/high-value node) could provide an attractive risk-to-reward short entry targeting ~154.427 or slightly below, contingent on bearish rejection signals.
• Tight stop placement above 156.40 – 156.70 helps manage risk in case of an unexpected breakout to the upside.
4-Hour Conclusion
The 4H timeframe supports a tactical short opportunity within a broader uptrend. Ideally, traders would wait for a retest of upper resistance to secure a better entry, aiming to catch the final leg of this correction.
1-Hour Timeframe
• Minor Trendlines & Bearish Break
• The 1H chart confirms multiple breakouts of smaller ascending trendlines, each followed by a retest and a bearish engulfing candle, signaling near-term downward continuation.
• Short-term order blocks around 156.39–156.74 may offer entries if price retests them.
• ATR Considerations
• Current 1H ATR is roughly 0.261, which suggests stops should accommodate the typical volatility.
• A proposed entry around 156.3925 with a stop near 156.738 targets the 154.36–154.42 zone, resulting in a risk-to-reward around 2:1, assuming precise trade management and no major fundamental surprises.
1-Hour Conclusion
The intraday structure remains bearish, with well-defined levels for a potential short entry. Traders should confirm momentum exhaustion on any retest of 156+ before committing to the position.
Overall Synthesis & Next Steps
• Weekly Bias: Bullish
• Daily & Intraday Bias: Short-term bearish correction
• Key Levels:
• Upside: 156.00–156.40 (potential retest/short entry zone)
• Downside: ~154.40 (4H order block / channel support), possibly 153.70 if momentum accelerates
• Trade Approach:
• Short Setup: A bounce into 156+ with bearish rejection could offer a compelling short entry.
• Longer-Term Upside: Once the correction completes around the 154 region (or slightly lower), look for bullish signals to rejoin the weekly uptrend targeting new highs.
Note: Always keep an eye on the macro calendar—particularly interest rate announcements from the Bank of Japan and the Federal Reserve—as they can shift USD/JPY momentum rapidly.
Disclaimer:
This analysis is for informational purposes only and does not constitute financial advice. Market conditions can change quickly, and it is vital to employ proper risk management.
Weekly Timeframe
• Ascending Channel
• USD/JPY has been trading within a broader ascending channel. After briefly breaking below on July 29, price re-entered this channel around October 7 and continues to respect it.
• The overall structure has consistently formed higher highs and higher lows, though price is currently at a lower high within the channel.
• EMAs & Bollinger Bands
• The 20, 50, 100 EMAs on the weekly chart slope upward and are stacked in a bullish configuration, indicating a larger uptrend.
• Price remains in the upper Bollinger band, reflecting underlying strength; however, the bands are widening, implying potential for increased volatility.
• Momentum & Capital Flows
• RSI is above 50 but is currently testing its RSI-based moving average as well as an RSI trendline. A break below could signal deeper weekly correction, although the broader trend remains bullish.
• MACD is above zero and bullish but shows signs of weakening momentum near the top.
• CMF (Chaikin Money Flow) remains positive, suggesting steady capital inflows despite the recent consolidation.
• Macro Context
• The interest rate differential favors the U.S. dollar unless the Bank of Japan unexpectedly raises rates (e.g., on October 23). Even with a potential BOJ hike, the overall USD yield advantage may persist unless there is a significant policy shift.
Weekly Conclusion
The higher timeframe bias is bullish. However, the pair appears to be in a corrective phase (wave 4) within that broader trend, potentially setting up a wave 5 push that could break prior highs, pending confirmation on lower timeframes.
Daily Timeframe
• Rising Wedge / Channel
• On the daily chart, USD/JPY has formed a rising wedge-like structure. Price is currently near 155, with potential downside toward 154 if selling pressure continues.
• A cluster of support is found around the lower channel boundary, the 100 EMA, and various Fibonacci retracement levels (0.382 and 0.5).
• EMAs & Bollinger Bands
• The daily 20, 50, and 100 EMAs remain upward sloping, consistent with a larger bullish bias.
• Price has dipped below the 20 EMA, finding intermittent support at the 50 EMA. A decisive reclaim of the 20 EMA could drive a retest of upper channel resistance. Failure to do so may open further downside toward the 100 EMA.
• Currently trading near the lower Bollinger band, indicating near-term weakness on the daily timeframe.
• Ichimoku
• Price remains well above a thick Ichimoku Cloud, suggesting strong long-term support. However, there may be room for further downside before interacting with the Cloud.
• Momentum Indicators
• RSI sits below 50, indicating a short-term bearish tone.
• MACD is in a bearish phase, aligning with the current pullback.
• CMF remains positive but is starting to decline, hinting that outflows may briefly exceed inflows.
Daily Conclusion
The daily structure is still within a larger bullish trend but is undergoing a corrective pullback. A deeper move to the lower boundary of the rising wedge or channel (and possibly the 0.5 Fibonacci retracement) is plausible before resuming the broader uptrend.
4-Hour Timeframe
• Bearish Sub-Structure & Order Blocks
• After rejecting near 156, price has formed a short-term downtrend channel/structure on the 4H. A clear order block around 154.427 aligns with the lower portion of this channel.
• A bounce from that zone could complete the corrective phase before resuming the daily uptrend.
• EMAs & Momentum
• Price is oscillating around the 200 EMA on the 4H chart. Recent attempts to break below were quickly reversed, but so far, the short-term trend remains bearish.
• RSI is below 50, confirming a short-term downward bias.
• MACD shows waning bullish momentum, consistent with further downside risk toward support levels.
• Potential Short Setup
• A retest of the 156 region (daily order block/high-value node) could provide an attractive risk-to-reward short entry targeting ~154.427 or slightly below, contingent on bearish rejection signals.
• Tight stop placement above 156.40 – 156.70 helps manage risk in case of an unexpected breakout to the upside.
4-Hour Conclusion
The 4H timeframe supports a tactical short opportunity within a broader uptrend. Ideally, traders would wait for a retest of upper resistance to secure a better entry, aiming to catch the final leg of this correction.
1-Hour Timeframe
• Minor Trendlines & Bearish Break
• The 1H chart confirms multiple breakouts of smaller ascending trendlines, each followed by a retest and a bearish engulfing candle, signaling near-term downward continuation.
• Short-term order blocks around 156.39–156.74 may offer entries if price retests them.
• ATR Considerations
• Current 1H ATR is roughly 0.261, which suggests stops should accommodate the typical volatility.
• A proposed entry around 156.3925 with a stop near 156.738 targets the 154.36–154.42 zone, resulting in a risk-to-reward around 2:1, assuming precise trade management and no major fundamental surprises.
1-Hour Conclusion
The intraday structure remains bearish, with well-defined levels for a potential short entry. Traders should confirm momentum exhaustion on any retest of 156+ before committing to the position.
Overall Synthesis & Next Steps
• Weekly Bias: Bullish
• Daily & Intraday Bias: Short-term bearish correction
• Key Levels:
• Upside: 156.00–156.40 (potential retest/short entry zone)
• Downside: ~154.40 (4H order block / channel support), possibly 153.70 if momentum accelerates
• Trade Approach:
• Short Setup: A bounce into 156+ with bearish rejection could offer a compelling short entry.
• Longer-Term Upside: Once the correction completes around the 154 region (or slightly lower), look for bullish signals to rejoin the weekly uptrend targeting new highs.
Note: Always keep an eye on the macro calendar—particularly interest rate announcements from the Bank of Japan and the Federal Reserve—as they can shift USD/JPY momentum rapidly.
Disclaimer:
This analysis is for informational purposes only and does not constitute financial advice. Market conditions can change quickly, and it is vital to employ proper risk management.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.