FX.co ★ Jackroay | USD/JPY

I continue to view the broader USD/JPY outlook through the lens of a weakening dollar scenario as a baseline, yet I clearly recognize that the market is now transitioning into a far more nuanced and structurally complex phase. I observe on the daily chart that the upward movement is still developing, but I interpret this advance as being corrective and terminal in nature rather than the start of a fresh impulsive rally within Elliott Wave theory. I note that the breakout above the 157.892 resistance level signals temporary buyer dominance and confirms the resolution of the prior consolidation phase. I emphasize, however, that this breakout does not automatically validate a true impulsive structure, as I still see excessive overlaps that are characteristic of corrective price behavior. I place strong analytical importance on the current price region near 157.907, as I believe the surrounding resistance zone represents a critical decision area for market participants. I consider 158.880 to be the key threshold that will determine whether buyers truly possess the strength to extend the move. I remain skeptical of sustained upside beyond this area, as I interpret the wave structure as either the final segment of wave (iv) or a prolonged wave B within a broader corrective pattern. I acknowledge that a longer-term extension toward 161.951 is technically possible, but I firmly believe such a move would require exceptionally strong and supportive US dollar fundamentals. I maintain that downside risk remains substantial once the current upward pullback exhausts itself. I identify 154.346 as a pivotal support zone that will shape the character of the next decline. I project that a breakdown below this area would naturally draw price toward 152.823 and potentially 151.542, which I see as logical gravitational targets within the corrective framework. I stress that the fragmented nature of the upward structure reinforces my expectation that the market is preparing for a next-degree bearish wave rather than sustainable trend continuation.

I turn my attention to the lower timeframes and note on the H1 chart that a clear short-term uptrend has been in place, driven by a sharp rally toward daily resistance. I observe that price not only reached but briefly exceeded the average daily upward range, which I interpret as a signal that short-term exhaustion risks are rising. I recognize the importance of the visible selling reaction near 158.05, where I see a pronounced pinbar formation that reflects active seller participation. I consider this reaction as early evidence that supply is re-emerging near resistance. I further note that my arrow and basement indicators are aligning with this view by signaling a corrective pullback. I pay close attention to the 157.21 area, which I identify as a former resistance zone turned potential support that has not yet been retested. I believe the market often seeks such levels, and I expect price to gravitate back toward this zone before making any meaningful directional decision. I state that if price tests this level and produces a confident bullish response, I would reassess buying opportunities in alignment with the prevailing intraday trend. I then expand my view to the weekly chart and acknowledge the undeniable strength displayed by US dollar buyers over recent months. I recognize that the prolonged battle around the 9% Fibonacci retracement level culminated in a decisive breakout, which I interpret as a major technical victory for bulls. I see the subsequent pullback not as weakness, but as structural reinforcement of the trend. I therefore accept that the failed weekly correction underscores the resilience of the broader uptrend. I expect price to challenge the 162.00 high, and I believe buyers will ultimately attempt to break beyond it. I remain aware of intervention risks and external rhetoric, yet I conclude that the technical picture overwhelmingly favors continued bullish pressure. I ultimately align my outlook with the message of the charts, as I believe any short-term weakness should be viewed as corrective within a dominant and deeply entrenched upward trend.