FX.co ★ Konnect2fx | USD/JPY

I am currently analyzing the weekly chart, and I find the situation unclear because I observe that a reversal candle has formed. I am noting that during at least the two previous monthly downward reversals – specifically on June 30 and January 5 of last year – I saw that such candles distinctly indicated a subsequent downward direction. I am interpreting this pattern to mean it is clear to me that the next weekly candle will likely indicate a downward reversal in quotes, continuing this established behavioral sequence. I am already seeing indications that the recent rally is ending, and I feel this was confirmed yesterday when USD/JPY updated the strong support level at 158.114. I remember that this level previously served as a weekly resistance point, so I perceive its current role as support to be a critical test for buyer strength, and the breach suggests weakening momentum to me

Therefore, I believe a decline should not be unexpectedly dismissed, and I am considering selling from the market open as a viable strategy. However, I am also cautious and think that if buyers begin aggressively pushing quotes upward at the very beginning of the week, I would find it best to patiently wait for the peak of that counter-rally before executing any sell orders. I am essentially convinced that a change in direction is being telegraphed, as I see confirming signals from technical indicators across all major timeframes. Yet, according to my trading regulations, I require more compelling confirmation before full commitment; I specifically need to witness a decisive breakout of the weekly trend line alongside a breach of the key weekly support at 157.730. Furthermore, I would insist on seeing the weekly candlestick consolidate and close below that level to validate the bearish shift beyond any doubt. Consequently, I am planning for sales next week as my priority, and I am setting my protective stop loss at 159.540 to prudently manage my risk against any sudden, sustained bullish reversals that could invalidate my current analysis. I am constantly reminding myself that price action is paramount, so while my bias is bearish, I am prepared to let the market's actual movements have the final say in my decisions. I am structuring my approach to be both proactive and reactive, ensuring I act on confirmation rather than mere anticipation, as I navigate the inherent uncertainties of the forex market.