USDJPY Analysis : Bullish Channel Strategy & FMFR Zone Reaction🧩 Market Structure Overview
USDJPY has been in a strong bullish market structure, forming consistent higher highs and higher lows since the beginning of July. The pair recently created a rising ascending channel, where price action has respected both the upper and lower bounds with clean impulsive and corrective moves.
From the 11th to 15th July, USDJPY moved steadily within this bullish channel, forming minor consolidation zones and reacting to short-term supply-demand levels. However, on the 15th, we witnessed a pullback from the upper channel resistance, indicating short-term profit-taking or internal bearish liquidity sweep.
🧠 Current Price Action
Now, price is pulling back and approaching a high-confluence demand zone, marked as:
FMFR (Fair Market Fill Range): A zone where unfilled buy-side orders are likely resting.
SR Flip (Support-Resistance Interchange): A previous resistance zone, now turned into a potential support base.
This area (between 146.80 – 147.00) has multiple confirmations:
Past supply zone → broken and retested
Strong impulsive bullish move originated here
Mid-point of the current bullish channel
Psychological level (147.00 round number)
The market is now offering a potential buying opportunity from this zone, provided a bullish confirmation pattern is printed on lower timeframes (1H or 30M).
🔍 Key Technical Confluences
Bullish Ascending Channel:
Clearly respected — suggesting institutional accumulation. Price is now retesting mid-level or base structure of this channel.
FMFR Zone:
Typically used to spot unbalanced price areas where limit buy orders may rest. Smart money often returns to fill these zones before moving further.
SR Flip:
The prior supply zone from July 8–10 was broken decisively, and price is now using this same level as support.
Liquidity Sweep & Trap:
The current rejection from the channel top may have liquidated early longs. That opens room for a smart-money reversal from the deeper FMFR zone.
📌 Trading Plan (Execution-Based Strategy)
🔽 Entry Criteria:
Wait for a clear bullish reversal candle within the FMFR zone (e.g., bullish engulfing, pin bar, morning star).
Entry can be refined on the 1H or 30M timeframe using a BOS (Break of Structure) signal.
🟢 Buy Zone:
Between 146.80 – 147.00
🔴 Stop Loss:
Below 146.40, well below the FMFR zone and recent wick lows
🎯 Take Profits:
TP1: 148.20 – Retest of the central channel zone
TP2: 149.60 – Next Major Reversal Zone
TP3 (Optional): 150.00 psychological round level (if bullish continuation breaks structure)
⚠️ Risk Management Tips:
Wait for confirmation — don’t rush into the zone without candle proof.
Risk only 1-2% per trade idea.
Adjust lot size according to stop-loss distance.
Avoid chasing if price closes below 146.40 — structure will be invalid.
🔮 What Could Invalidate This Setup?
Clean break below 146.40 support with bearish structure forming (LL, LH)
Bearish fundamentals from USD side (e.g., CPI, FOMC impact)
A tight channel breakdown without bullish volume
📅 Fundamental Backdrop:
USD is currently reacting to macro data and rate expectations.
JPY remains weak structurally, unless BOJ introduces surprise tightening.
US CPI & Fed commentary may influence short-term volatility and liquidity grabs.
🧠 Conclusion:
USDJPY is presenting a high-probability buy setup as it revisits a strong confluence zone formed by FMFR + SR flip. Smart money often re-engages at these levels after liquidity hunts, especially within a bullish structure. Watch for confirmation on lower timeframes, and manage risk responsibly.
This trade idea is based on price action, structure, and institutional concepts, aiming for a trend continuation with clear invalidation levels.
