TechnicaL Analysis – Potential Reversal After 70 Days of USDJPY

9月18日

After 70 days since reaching the highest price in the last 38 years and a sharp rejection, the market continued to exhibit a strong bearish trend. However, we are beginning to see early signs of a potential reversal, and the daily bullish divergence supports the idea of a pullback and possible recovery. Nevertheless, key levels need to be broken for this scenario to be confirmed.
Key Support Level at $141.93
One of the most critical levels to watch closely is $141.93. Holding above this level could indicate a trend reversal, while a failure to hold may signal the continuation of the bearish trend. If the price can maintain above this level, it could pave the way for a significant pullback.
Breakout of the Key Resistance at $143
The first key resistance level that needs to be breached is $143. If the price breaks this level, it’s essential to hold above it for at least two days, followed by a successful retest to confirm the S/R flip (support/resistance flip). This would provide a clear signal to enter the market, potentially leading to further upside movement.
Daily Bullish Divergence as an Additional Signal
Moreover, we observe a daily bullish divergence – a situation where the price is making lower lows, but the RSI indicator is making higher lows. This pattern indicates a weakening bearish trend and strengthens the possibility of an upward reversal.
Pullback to the Trendline and Fibonacci Confluence
If the resistance at $143 is broken, the next expected step could be a pullback towards the main trendline. This area may coincide with the 0.5 Fibonacci retracement level, creating a confluence of resistance and support. This zone would be crucial for confirming a continuation of the bullish movement.
Potential Drop in Case of Rejection
However, if the resistance at $143 is not broken and the price gets rejected, it would not be surprising to see a direct drop towards the support zone between $134-$130. This drop could provide a new buying opportunity if buyers return in this zone, but it could also indicate further weakness if the support fails to hold.

Disclaimer:
This analysis is provided for educational purposes only and reflects my personal view of the market. I am not a financial advisor, and anyone considering trading or investing should conduct their own analysis or consult with a licensed financial advisor before making any decisions. Trading carries significant risk, and each individual is responsible for their actions in the market.