USDJPY and GBPJPY Further drop?Hello traders, this is a complete multiple timeframe analysis of this pair. We see could find significant trading opportunities as per analysis upon price action confirmation we may take this trade. Smash the like button if you find value in this analysis and drop a comment if you have any questions or let me know which pair to cover in my next analysis.
JPYUSD trade ideas
Uptrend targetsUSD/JPY filled the May 10–11 gap and is now showing signs of a bullish bounce from the 145.36 zone. Buyers are testing higher, but 146.50 remains key resistance. A break above could open room toward 147.50, while failure may trigger another drop. Price is currently neutral-bullish; wait for confirmation before entering.
Bullish Engulfing Pattern: A Strong Reversal SignalBullish Engulfing Pattern: A Strong Reversal Signal
The bullish engulfing pattern is a two-candlestick formation that suggests a possible reversal from a downtrend to an uptrend in the financial market. This particular pattern holds immense value for traders and technical analysts as it equips them with the means to discern potential buying opportunities. In this article, we will explain how traders implement this pattern in their trading strategies.
What Is a Bullish Engulfing Pattern?
The bullish engulfing is a technical analysis pattern consisting of two candles. This formation emerges when a large bearish candlestick is succeeded by a larger green one that entirely engulfs it.
What does the bullish engulfing mean? The bullish engulfing indicates a potential shift in market sentiment, suggesting that buying pressure might surpass selling pressure in the near future and highlighting a possible reversal from a downtrend to an uptrend.
Traders can find the bullish engulfing candlestick pattern across various financial instruments, including currencies, stocks, cryptocurrencies*, ETFs, and indices.
Bearish Engulfing vs Bullish Engulfing
The bullish engulfing pattern has a counterparty - bearish engulfing. The bearish engulfing pattern occurs during an uptrend, indicating a change in market sentiment and potential price reversal to the downside. It consists of two candles, where the second is larger and bearish and completely engulfs the body of the preceding candlestick.
How Can You Trade the Bullish Engulfing Pattern?
Here are some steps traders consider when trading with the bullish engulfing:
- Identification: Look for a clear bullish engulfing setup on a price chart at the end of a downtrend.
- Entry Point: Although candlestick patterns don't provide precise entry and exit points as chart patterns do, there are general rules you could use.
The entry point could be set slightly above the high of the bullish engulfing formation. In the conservative approach, traders enter the market after several candles close higher. In a risky approach, traders open a buy position after the pattern is formed.
- Exit Point: A stop-loss level could be below the low of the engulfing candle or below a nearby support level. A take-profit level could be based on a trader’s risk/reward ratio or key resistance levels.
- Risk Management: You can consider a risk management strategy to potentially limit losses. Traders focus on appropriate position sizing and risk-to-reward ratios to maintain a balanced approach to trading.
- Trade Monitoring: Once you have entered the trade, monitor price action and market conditions. Pay attention to any sign of reversal confirmation or potential obstacles that may invalidate the signal.
- Stop-Loss and Take-Profit Adjustment: As the trade progresses, you may consider adjusting your stop-loss level to protect potential returns. Similarly, you may consider adjusting your take-profit level if the price signals a strong uptrend.
Live Market Example
Let's consider an example of a bullish engulfing on the forex chart. The bullish engulfing candle in the example below is marked with 1 and 2. The trader sets the entry point above the green candle and a stop-loss level below it. The take profit is at the closest resistance level.
How Do Traders Confirm a Bullish Engulfing Candlestick Pattern?
Confirming this pattern enhances the reliability of its signals and helps traders make informed decisions. Here are key steps to confirm it:
- Volume Analysis: Traders typically look for increased buying trading volume accompanying the candle. Higher volume suggests stronger buyers’ interest and validates the reversal signal.
- Follow-Up Candlesticks: Waiting for subsequent closes can confirm the upward momentum. A series of higher closes strengthens its credibility.
- Support Levels: If it forms near a significant support level, this adds context to the reversal, as buyers are stepping in at a critical price point.
- Technical Indicators: Complementary indicators like the Relative Strength Index (RSI), Stochastic Oscillator, or a pair of moving averages can confirm the shift in sentiment.
- Market Context: Traders assess the overall market trend and news to ensure the formation aligns with broader market conditions.
Bullish Engulfing and Other Patterns
Let’s take a closer look at how this pattern compares to other chart formations, like the piercing and harami.
What Is the Difference Between a Bullish Engulfing and a Piercing Pattern?
A bullish engulfing pattern occurs when a large bearish bar is followed by a larger candlestick that completely overtakes the former's body. This indicates a strong potential reversal from a downtrend to an uptrend.
In contrast, a piercing formation also signals a potential reversal but is slightly weaker. It forms when a bearish candle is followed by a bullish candle that closes above its midpoint but doesn’t envelop it entirely.
What Is the Difference Between a Bullish Engulfing Pattern and a Bullish Harami Pattern?
The bullish harami pattern consists of a large red candle followed by a smaller green candle that is completely contained within the body of the red candle. This formation suggests a potential reversal but is generally considered less strong than the bullish engulfing candle pattern, as the latter completely envelops the previous bearish bar, showing more decisive buying pressure.
Final Thoughts
While this pattern offers valuable insights into potential trend reversals, it's essential to complement it with technical indicators and robust risk management for effective use. Also, be sure to explore other patterns as they may look very similar but provide different signals.
FAQ
What Is a Bullish Engulfing Pattern?
A bullish engulfing pattern is a two-candlestick formation in technical analysis that suggests a potential reversal from a downtrend to an uptrend. It occurs when a large bearish candlestick is followed by a larger bullish candlestick that completely engulfs the body of the preceding bearish candle.
How Reliable Is the Bullish Engulfing Pattern?
The reliability of the bullish engulfing pattern as a reversal signal depends on various factors, including the overall market context, confirmation from other technical indicators, and the timeframe being analysed. While it can be a strong indication of a potential trend reversal, it is not foolproof and should be used in conjunction with other tools and fundamental analysis.
What Is a Bullish Engulfing Candle Trading Strategy?
The bullish engulfing candle strategy involves identifying this pattern at the end of a downtrend as a signal for a potential sentiment shift. Traders typically enter a buy position slightly above the high of the closing bar, with stop-loss levels set below the low or beneath nearby support levels. Take-profit levels are determined based on risk/reward ratios or key resistance levels.
Do Wicks Matter in Engulfing Candlesticks?
Yes, wicks matter in the formation. The wicks provide insights into price rejection and volatility. For a strong confirmation, the absence of long upper wicks suggests sustained buying pressure, reinforcing its validity as a reversal signal.
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USD/JPY 4H Chart Analysis – Potential Breakdown or Reversal
**USD/JPY 4H Chart Analysis – Potential Breakdown or Reversal**
**Technical Summary:**
The chart shows USD/JPY trading within a rising channel, with recent price action indicating a possible bearish shift. Liquidity above a recent high has been taken, followed by a **change of character (CHoCH)** suggesting potential bearish intent.
**Key Highlights:**
* **Liquidity Grab:** Price swept prior highs, likely triggering buy-side liquidity.
* **CHoCH Identified:** Structure broke to the downside, indicating a bearish shift in market sentiment.
* **Critical Level:** A **4H close below 144.802** is crucial for confirmation of further downside movement.
* **Channel Support:** Price is currently testing the lower boundary of the ascending channel.
* **Scenarios:**
* **Bullish Case:** If the price respects the channel and pushes higher, targets near **150.000** could come into play.
* **Bearish Case:** A confirmed breakdown below **144.802** opens the path toward the **139.000 demand zone**.
**Outlook:**
* Monitor for 4H candle close below 144.802 for bearish confirmation.
* Alternatively, bullish continuation is valid if support holds and structure shifts upward again.
**Disclaimer:** This analysis is for educational purposes only. Always conduct your own research before making trading decisions.
USDJPY Setup: Weak Highs, Smart Money Buys Liquidity!!📊 USDJPY is showing signs of a Smart Money reversal from the discount zone.
This 30-minute chart reveals institutional intentions hiding in plain sight — with clear signs of engineered liquidity grabs and the potential for a strong bullish continuation.
🧠 What’s Happening on the Chart:
✅ Price has swept sell-side liquidity below the recent lows
✅ Retraced cleanly to the 61.8% Fibonacci level at 146.26, a classic Smart Money entry zone
✅ The current price is hovering around the 50% retracement, forming a potential higher low structure
📈 Bullish Confluence:
Price is rebounding from a discount zone (golden ratio: 61.8% Fib)
There’s a clearly defined "weak high" marked around 147.00 — Smart Money typically targets these areas
Above that, there are two stacked buy-side liquidity levels:
147.670
148.282
Final target? The liquidity pool near 148.654 — a clean magnet for price
🎯 Trade Idea:
Long Bias from 146.26–146.43 zone (Smart Money re-entry)
Targets:
TP1: 147.00 (Weak High)
TP2: 147.670 (Buy Side Liquidity)
TP3: 148.282 – 148.654 (Full Liquidity Sweep)
Invalidation: Clean break below 146.20 with strong bearish volume
📌 Why This Setup Works:
This setup uses Smart Money Concepts (SMC):
Weak Highs often signal institutional targets
Fair Value Gap (FVG) + Fib confluence adds strong bullish probability
Retail shorts get trapped, thinking the rally was a pullback — while institutions accumulate at discount
🧠 Pro Tip:
Watch for confirmation with a bullish engulfing candle or break of short-term structure before full entry.
Front-running the Smart Money leads to losses. Let them move first.
💬 Comment "USDJPY MOVE" if you're planning to trade this setup
💾 Save this chart for later — this is how the big players trade FX.
UPDATED ANALYSIS ON USD/JPYUSD/JPY 4H - AS you can see price has recently come to clear a FVG that was left over from the last impulsive wave that drove price lower. We have now seen price correct itself trading us up and into this area.
I now want to see price break down, confirming that the corrective wave trading us into this inefficiency has finished and a new bearish wave trading us lower is ready be printed.
We will get the confirmation we need one price has broken structure more fractally to the downside. I have marked out the last protected low within the corrective wave. Once we have a break here we have our confirmation.
This is because within bullish structure we break highs and protect lows, so by breaking a low we are not longer following the laws of bullishness but rather following the laws of bearishness, confirming this next bearish impulse.
USD/JPY Support Test at Prior Resistance + Trendline in-PlayUSD/JPY came into the week with a full head of steam, testing above the 148 level after having found support at 145 last Friday. The pullback on Tuesday was pronounced, helped along by a weak U.S. CPI report, but so far USD/JPY and USD bulls have stepped up at key spots of support. In DXY, prior neckline resistance from the inverse head and shoulders pattern has come into play and in USD/JPY, it's a confluent spot at 145.92 and 146.20 that's stepped-in to hold a possible higher-low.
There's also the trendline projection which, notably, held resistance after both the BoJ meeting two weeks ago and the FOMC rate decision last week. That trendline is shown in red and it's coming into play as support.
For next resistance - the 200-day moving average seems important and that plots about 40 pips below the 150.00 handle. Given the numerous traps that have printed on both sides of the Yen this year, chasing still seems dangerous and attempting to work with pullbacks in trends remains an attractive way forward. - js
Too Many Bullish Clues — Greed Activated📍Current Price: 143.437
TimeFrame 30Min
Bullish Reasons:
+ Strong Support
+ Psychological Level
+ Tweezer Bottom
+ Bullish RSI Divergence
+ Channel Bottom
= Potential Bullish Reversal
Support & Resistance Levels:
• 142.000 – Strong Support + Psychological Level
• 140.000 – Strong Support + Psychological Level
• 148.000 – Psychological Level + Price Target
• 150.000 – Psychological Level
"Trade smart – always follow your risk management.
Protect your account first, profits will follow.
Happy trading!"
USD/JPY Rejected at Trend ResistanceUSD/JPY extended more than 6.2% off the yearly low with price registering an intraday high at 148.65 on Monday before reversing lower. The focus now shifts back to this turn from downtrend resistance with initial support now in view.
A closer look at Japanese Yen price action shows USD/JPY trading within the confines of embedded ascending pitchfork extending off the lows. The lower parallel now converge on near-term support at the May opening-range high (ORH) at 145.92 and the 38.2% retracement of the April advance / objective weekly open at 145.30/37 - a break / close below this slope would suggest a more significant high was registered this week / threaten resumption of them broader downtrend. Subsequent support objectives seen at the May open / 61.8% retracement at 143.05/24 with the yearly low-day close (LDC) at 141.56 .
Initial resistance is eyed along-the median-line and is backed by key levels at 148.67/74 and the March high-day close (HDC) / 200 day moving average near 149.50/60 - a breach / close above this region is ultimately needed to validate a breakout of the yearly downtrend / suggest a larger trend reversal is underway. The first major technical consideration in the event of a breakout is eyed at the 61.8% retracement of the yearly range / 2022 & 2023 highs at 151.63/94 - look for a larger reaction there IF reached.
Bottom line: USD/JPY has responded to confluent downtrend resistance with the pullback now approaching initial support and the first test for the bulls. From a trading standpoint, losses would need to be limited to the lower parallel IF price is heading for a breakout here with a close above the 200-day moving average needed to fuel the next leg of the advance.
-MB
Potential bullish bounce?USD/JPY has bounced off the support level which is a pullback support that is slightly above the 50% Fibonacci retracement and could rise from this level to our take profit.
Entry: 145.89
Why we like it:
There is a pullback support level which is a pullback support that is slightly above the 50% Fibonacci retracement.
Stop loss: 144.44
Why we like it:
There is a pullback support level that is slightly below the 61.8% Fibonacci retracement.
Take profit: 148.70
Why we like it:
There is a pullback resistance level.
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USDJPY 4H BULLISH ZONEBased on the USD/JPY 4-hour chart we provided, the market is currently in an ascending channel. A recent dip from the upper boundary of the channel suggests a possible retracement before a bounce back up. The chart indicates a bullish continuation pattern with a projected move toward the top of the channel and a marked target around 148.725–148.855.
Suggested Buy Trade Setup:
Entry Zone (Buy Limit):
Near the mid-channel or support trendline: 145.50–145.80
Take Profit Levels (TPs):
1. TP1: 147.00 – conservative target (near recent highs)
2. TP2: 148.00 – key resistance and psychological level
3. TP3: 148.725 – top of the channel
4. TP4: 148.855 – potential breakout level or final target
Stop Loss (SL):
Below channel support: 144.80–145.00, depending on risk appetite
USDJPY: Bearish Trend ContinuesThe exchange rate of the US dollar against the Japanese yen continues its downward trend, further retreating from the 148.65 area (the highest level since April 3) touched earlier this week. During the European trading session, driven by multiple factors, the exchange rate dropped below 146.00. The daily chart of the US dollar against the Japanese yen shows that the exchange rate is in a downward channel. Currently, the price is retesting the important support area of 145.230, which has served as a resistance level on many occasions before. From the perspective of the Bollinger Bands indicator, the exchange rate has declined from the upper band (147.848) and is currently hovering near the middle band, indicating that the short - term downward pressure still exists.
you are currently struggling with losses, or are unsure which of the numerous trading strategies to follow, at this moment, you can choose to observe the operations within our channel.
USD/JPY Multi-Timeframe Trading Plan – Week AheadUSD/JPY is trending higher short-term but remains below key resistance on the daily chart. The daily timeframe shows an inverted head-and-shoulders forming, with a neckline at 152. Until that breaks, rallies into 148–150 are likely to fade. The 1-hour chart shows a rising wedge from 142 to 148.5 with support around 145.0. Momentum is slowing, warning of potential exhaustion near 148.
On the 15-minute chart, recent price action shows a bull flag and a double bottom, offering buy zones at 146.10–146.30. The plan for early week is to long dips to this zone, targeting 146.80–147.20 with stops below 145.90. Watch for fades around 147.50–148.00 mid-week. A break above 148.00 opens room to 150.00; below 145.00, momentum shifts bearish.
Strategy: Buy pullbacks early in the week; fade rallies near 148 mid-week. Flip long above 148.00 or short below 145.00. Use tight stops and manage risk per trade.
BULLISH IDEA ON USDJPYThe DXY is bullish and the JXY is bearish this means we can get to see good bullish momentum in this pair. USDJPY has been in an uptrend for a long time now and we recently saw a divergence that played out yet the higher low still has not been broken so this can be a good buying opportunity as price is at a good support level. Stoploss placed just below the higher low.
The Rise of the US Dollar Pressures the Japanese Yen!The US dollar has regained its upward momentum recently, supported by market optimism following the mutual US-China agreement to reduce tariffs. One of the most notable currencies to weaken against the US dollar is the Japanese yen.
The USD/JPY pair has risen, forming a series of higher highs. The recent movement highlights three key levels to watch closely.
The 145.644 level is considered a positive signal for a renewed upward move, targeting the 147.755 level.
Meanwhile, the 144.822 level serves as a key support to maintain the bullish outlook. A drop below this level and a daily or 4-hour close beneath it would indicate a shift from a bullish to a bearish trend.