FX.co ★ evanshad | USD/JPY

Technical Analysis of the USD/JPY Pair

The daily chart for the USD/JPY pair shows significant price action from February to August 2026. The pair experienced a dramatic shift from a strong uptrend to a sharp sell-off, followed by a period of consolidation and correction. Understanding these levels and technical indicators is crucial for making informed trading decisions. Previous Uptrend: The USD/JPY pair enjoyed a strong and consistent uptrend from mid-February 2026, supported by an ascending trendline (white line) that began in May. The pair reached record highs near 163.923, driven by sustained buying pressure. Major Reversal: In late July, the chart featured a large red candlestick indicating a sharp and sudden price collapse. This candlestick decisively broke the ascending trendline and breached key support levels at 160.969 and 158.536. Current Situation: Following the collapse, the pair attempted a rebound but failed to recover the broken levels. The price is currently fluctuating above 158.536, suggesting a period of uncertainty or an attempt to establish a base, but the upward momentum remains weak compared to the previous selling pressure. Trading Recommendations: Overall Bias: The overall bias is bearish in the short and medium term, especially after the break of the main uptrend line. Sell Scenario (Preferred): Entry: If the price fails to hold above 158.536 and the break is confirmed by a decisive daily close below this level, selling opportunities can be explored. Targets: The first target would be the support level at 156.393. Stop Loss: The stop loss should be placed above 158.536 (e.g., at 159.500) or above the recent highs. Buy Scenario (Cautious): The extremely cautious buy scenario requires a strong and sustained break above the resistance level of 160.969, in addition to a retest of the uptrend line. This scenario is less likely at the moment. Alternatively, if the price reaches 156.393 and displays strong bullish reversal patterns (such as Japanese candlestick patterns), a buying opportunity may arise with a tight stop-loss order placed below 156.393. Tip for traders: Given the price fluctuating around a pivotal area (158.536), it is advisable to wait for clear directional confirmation, either through a break of key support or a break above resistance, before entering large trades. Risk management and stop-loss orders are essential in every trade.