USD/JPY - Bearish breakdown signals further downside potential!The USD/JPY pair has been experiencing a clear daily downtrend, characterized by a bearish market structure and strong downward momentum. Sellers have remained in control, pushing prices lower as the pair continues to respect the prevailing bearish trend. With each failed attempt at recovery, the market structure reinforces the dominance of sellers, signaling that the path of least resistance remains to the downside.
Despite this overall downtrend, the 4-hour timeframe recently exhibited a rising channel, where price action formed higher highs and higher lows, suggesting a temporary bullish retracement within the larger bearish structure. However, this channel has now been broken, signaling a potential shift back toward the primary trend. A break of this nature often suggests that the bullish correction has exhausted its strength, and sellers are regaining control to push the price lower once again.
Following the breakdown of this rising channel, the price has failed to reclaim previous highs, instead forming a lower high—a strong indication that bearish pressure is resuming. Given this development, there is a significant possibility that USD/JPY could retrace toward key technical levels, such as the Golden Pocket (between the 0.618 and 0.65 Fibonacci retracement levels) or even the 4-hour Fair Value Gap (FVG) around 145.00.
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