FX.co ★ Konnect2fx | USD/JPY

SMC AND CRT BASED USDJPY TECHNICAL ANALYSIS Overall Market Structure The USDJPY daily chart shows a market that moved upward during the earlier part of the displayed period, reached a major high near 163.832, and then experienced a significant bearish reversal. After that reversal, price formed several movements in both directions, including a recovery toward the 159 area and another strong bearish leg toward the 153 region. From that lower area, buyers brought price back toward 157.855, where it is now trading. The overall structure is therefore not a continuous bullish trend. It reflects an earlier bullish phase, a strong bearish change in direction, and a later recovery that has reached an important resistance area. The latest price action is close to the marked 157.855 level, so the market is at a decision point. A sustained move above this area could improve the short-term bullish structure, while rejection and a move below nearby support could bring bearish pressure back into focus. Market Structure Shift and Break of Structure The chart initially shows higher highs and higher lows as price advances from the 159 area toward the upper region near 163.832. This upward movement suggests that buyers were controlling the earlier structure. The large bearish candles around late July then indicate a major change in price delivery. Price falls sharply from the upper region and breaks below previous areas where buyers had supported the market. This is consistent with a bearish Market Structure Shift (MSS), followed by bearish Break of Structure (BOS) as the decline develops. Later, price recovers from the 153 area and creates a sequence of higher lows and higher highs toward 157–159. This recovery shows that buyers regained some short-term control. However, the chart does not yet show a clear break above the major earlier high near 163.832. The latest recovery should therefore be treated as a bullish retracement or developing bullish structure rather than confirmation of a complete daily trend reversal. Major Buy-Side Liquidity The most visible major Buy-Side Liquidity (BSL) area is around the high marked near 163.832. This level represents an area above which traders may have placed buy stops, including stops from short positions and breakout orders. Price approached this upper region during the earlier bullish movement but then turned lower with strong bearish candles. The repeated highs near the upper area also make it an important reference point for future price action. If the market eventually returns to this zone, traders can observe whether price breaks above it with strong bullish displacement or briefly moves above and then falls back below. A strong close above the level may indicate acceptance at higher prices, while a quick rejection could suggest a liquidity sweep. There are also smaller internal buy-side liquidity areas above the recovery highs around 158.8–159.5 and around the intermediate highs near 157.8–158.8. These are nearer-term reference points, but they are not equivalent to the major high at 163.832. Sell-Side Liquidity and the Major Low Sell-Side Liquidity (SSL) is visible beneath the important lows formed during the bearish decline and subsequent consolidation. The chart’s major lower region is around 153.2, where price stopped falling and later began a substantial recovery. This area is significant because price previously reached it after a strong bearish move and then showed signs of buying interest. Stops may be located below such visible lows, making the area a potential liquidity target. Price may revisit this region, sweep below it, or continue to hold above it. The later lows around 156–157 also provide nearer-term SSL references, particularly where price paused before moving upward. The current chart does not show price at the major low; instead, it is trading near 157.855 after recovering from the lower region. If price falls below nearby swing lows and continues downward with strong candles, bearish continuation may become more likely. If it sweeps a low and quickly recovers, that would be a different price reaction and should be assessed separately. Trend Line Liquidity A descending trend line can be drawn from the major high around 163.832 through the sequence of lower highs that developed after the bearish reversal. This line represents the broader downward pressure visible after the late-July decline. Price action beneath a descending trend line can attract liquidity around repeated lower highs, as traders may place stops just above these points. The later recovery from the 153 area has moved upward toward the 157.855 level, but the broader sequence of lower highs following the major top remains important. The trend line should be treated as a visual guide rather than a fixed barrier. A clear break above it, followed by a successful retest and a higher high, would strengthen the case for a bullish structural change. If price reaches the line and is rejected, especially with strong bearish candles, it may indicate that sellers remain active. The chart alone cannot establish the intentions of large market participants, so the trend line is best used as a structure and liquidity reference. Bearish Order Block and Supply Zone The sharp bearish displacement from the upper region around late July suggests a potential bearish Order Block near the last bullish candles before the strong decline. The area around the upper 162–163 region is an important supply reference because price turned away from it and then delivered a substantial downward move. A potential bearish Order Block is not proof of institutional orders; it is a zone identified from the visible price reaction. The later bearish movement also created lower areas of supply around the recovery highs near 159 and the region around 158.8. These zones may act as resistance if price revisits them. The marked 163.832 level remains the clearest major upper reference, while nearer supply zones are useful for assessing the current recovery. If price moves into a potential bearish Order Block and forms rejection candles, lower highs or bearish displacement, it would support the idea that sellers are defending the zone. A strong close through the zone, on the other hand, would weaken that bearish interpretation. Bullish Order Block and Demand Zone The lower region around 153.2 is a potential bullish Order Block or demand area because price declined into this region, formed a base and then recovered strongly. The reaction suggests that buyers became active around the lows. The long lower wicks and subsequent bullish candles in this region are relevant evidence of rejection, although they do not guarantee that the zone will hold in the future. The recovery from this area progressed through the mid-154 and 155 regions before moving toward 157–158. This indicates that the demand reaction was followed by a meaningful upward movement. If price returns to the lower zone, traders can watch for whether it produces another strong bullish response or whether price breaks through it with bearish displacement. A daily close below the demand area would weaken the bullish case and could expose lower prices. As price is currently much closer to 157.855 than to the major demand zone, this lower area is better considered a broader structural reference rather than immediate support.

Fair Value Gap and Price Imbalance The large bearish candles around late July indicate a rapid movement in which price travelled through several levels with limited two-way trading. Such displacement can leave potential Fair Value Gaps (FVGs), which are areas of imbalance between candles. The exact boundaries of each FVG should be confirmed by examining the individual candle highs and lows, but the fast bearish leg from the 163 region toward 157–158 provides a likely area to inspect for bearish imbalance. Another possible imbalance may have formed during the later decline from the 159 area toward 153. These gaps can become areas where price revisits before continuing in its prevailing direction, although not every FVG must be filled. The bullish recovery from the lower region may also have created smaller bullish imbalances. If price retraces into a bullish FVG and responds with bullish displacement, it may support continuation of the recovery. If it revisits a bearish FVG and rejects, that may reinforce the presence of overhead selling pressure. FVG Combined With Order Block The relationship between an FVG and an Order Block can help identify areas where several technical observations overlap. On this chart, the upper region associated with the sharp bearish displacement is a potential area where a bearish Order Block and bearish imbalance may be close to one another. Such a combined zone can be watched as a possible resistance area during a future upward retracement. The region around the recovery highs near 158.8–159 may also contain smaller supply references, depending on the precise candle boundaries. On the bullish side, the lower base around 153.2 is a potential demand zone from which price moved upward, and any bullish imbalance formed during that recovery could provide additional context if price pulls back. These combined areas should not be treated as exact entry signals. Their value comes from observing how price behaves when it returns: whether it pauses, rejects, breaks through, or creates a new structural shift. Confirmation from candles and structure remains important. No Demand Candles During the Recovery During the recovery from the lower region, price advanced toward 157–159, but the movement was not a uniform sequence of large bullish candles. There are sections with smaller candles, pauses and pullbacks. Some of these smaller bullish candles may be assessed as potential No Demand candles when they show limited upward progress and relatively subdued volume compared with the preceding activity. However, a candle should not be labelled No Demand based only on its small body; its position, spread and volume in relation to surrounding candles also matter. In this chart, the recovery has reached an area where earlier price movement showed selling pressure. If upward attempts near 157.855 and the higher recovery levels continue to produce weak candles and fail to break previous highs, it may suggest that buying strength is limited. Conversely, strong bullish candles that close above nearby swing highs would weaken the No Demand interpretation and indicate that buyers may be gaining control. No Supply Candles Near Support No Supply candles are generally considered in the context of a decline or pullback where selling activity appears to reduce. The lower region around 153.2 contains price rejection and a subsequent recovery, making it an area where reduced selling pressure can be investigated. Some small candles during the later consolidation may also be potential No Supply candles, but the chart does not justify treating every narrow candle as confirmation of accumulation. The more useful observation is the reaction that followed the lower-price area: price stopped making sustained new lows and then began moving upward. This suggests that selling pressure was no longer producing the same downward progress. If price pulls back toward nearby support and forms narrow candles with reduced volume, followed by bullish displacement, it could strengthen the case for demand. If selling volume increases and price closes below support, the No Supply interpretation would be invalidated or weakened. Volume and Market Participation The volume panel shows noticeable increases during the major directional moves, particularly around the sharp bearish displacement in late July and the later decline from the 159 area toward 153. These spikes indicate periods of higher trading activity on the chart. Strong volume accompanying large bearish candles supports the observation that the downward moves had force, while increased activity during the rebound from the lows shows participation in the recovery. The later candles near 157–158 also show activity, but price is moving more narrowly than during the largest directional legs. Volume should be interpreted together with candle spread, closing position and market structure. High volume alone does not identify whether buying or selling will continue, and a volume spike can occur during either continuation or reversal. In this chart, the largest volume surges coincide with important price movements, making them useful for highlighting potential shifts in participation. The current volume bars can help assess whether a breakout or rejection near 157.855 is accompanied by meaningful activity. Current Price Action Around 157.855 The current price is shown at 157.854, almost exactly at the marked 157.855 horizontal level. The latest daily candle has an open of 158.038, a high of 158.219, a low of 156.948 and a close of 157.854. It therefore traded both above and below its opening price and closed near the marked horizontal level. The candle’s high shows that price tested higher levels, while its low shows that sellers also pushed price substantially lower during the session. The close near 157.855 makes this level particularly important for the next visible movement. It may act as resistance if price cannot sustain trading above it, or it may become support if buyers establish acceptance above the level and defend it on a retest. One candle alone does not confirm either outcome. The next daily candles should be assessed for their closing positions, wicks, range and volume, as well as whether they break nearby swing highs or lows. Bullish and Bearish Scenarios The bullish scenario would become stronger if price holds around or above 157.855, creates a higher low and then breaks the nearby recovery highs with clear bullish displacement. Such a move could open the way for a test of the next visible resistance areas around 158.8–159.5. A sustained break through those areas would further improve the recovery structure, although the major high near 163.832 would remain a much higher liquidity reference. The bearish scenario would strengthen if price repeatedly rejects 157.855, forms a lower high and then breaks below nearby support with decisive bearish candles. That could bring the recent lower swing areas into focus, followed by the broader demand region around 153.2 if the decline develops further. A sweep below a nearby low followed by a strong recovery would need to be distinguished from a confirmed bearish breakdown. Both scenarios are conditional, and the chart does not establish which one must occur. Final SMC Reading and Risk Awareness The USDJPY D1 chart shows a major bearish shift after an earlier advance toward 163.832, followed by a recovery from the lower region around 153.2. The recovery has brought price back to the marked 157.855 level, where the latest candle closed at 157.854. This makes the current area important for judging whether the recovery can develop into a stronger bullish structure or whether the earlier bearish pressure will resume. The major upper liquidity remains near 163.832, while the lower demand and sell-side liquidity reference is around 153.2. Potential Order Blocks, FVGs, trend-line liquidity and No Supply or No Demand candles can add context, but none should be treated as a guaranteed signal. A careful reading should focus on confirmed breaks, retests, candle closes and volume rather than predicting a direction from one candle. The chart supports a conditional view: bullish strength requires a sustained move above nearby highs, while bearish continuation requires rejection and a meaningful break of support. This is a technical interpretation of the supplied chart, not a certainty or a promise of trading results.