FX.co ★ FX-Perfact | USD/JPY

USD/JPY H4 Timeframe: The USD/JPY currency pair on the H4 chart shows a significant shift in market structure in recent weeks. Looking at the overall price movement, it appears that the uptrend that dominated from late June to late July experienced a significant disruption after a sharp decline in late July. The resulting correction not only erased most of the previous gains but also shifted the medium-term trend orientation from bullish to neutral. Using the 100 Moving Average (MA 100) and 200 Moving Average (MA 200) provides a clearer picture of this momentum shift. The 100 MA, depicted by the blue line, had previously been moving upward at a fairly steep angle. During the uptrend, prices tended to remain above the 100 MA, thus acting as dynamic support. Meanwhile, the 200 MA, indicated by the red line, was also moving upward, albeit with a gentler slope. This indicates that the long-term trend remains positive. However, a major change began when the price failed to maintain its position in the 163.99 area. The failure to break through this resistance triggered a very aggressive sell-off. The subsequent sharp decline caused the price to break through the 100- and 200-day moving averages (MAs) in a relatively short time. The breakout of these two moving averages is a crucial technical signal, indicating a shift in dominance from buyers to sellers. A closer look reveals that the 163.99 area represents the strongest resistance on the current chart. This level marked the highest peak reached before the market reversed. Below it lies another resistance level, the 162.97 area, which previously served as support before being breached by selling pressure. This level has now become a resistance level that must be overcome if USD/JPY is to resume its uptrend. The next resistance levels are located at 161.62 and 160.89. These two levels are close to the 200-day moving average, creating a fairly strong resistance zone. As long as the price remains below this area, the chances of further upside are relatively limited.

Meanwhile, the nearest support level is at 159.54, which currently represents a new equilibrium point. The price has hovered around this level several times without generating sufficient momentum to continue rising. This condition indicates that the market is in a consolidation phase after experiencing very high volatility. Below 159.54 lies the next support levels at 158.80 and 157.66. These two areas served as price reversal points after a major decline in early August. Stronger support levels are at 156.71 and 155.22. The 155.22 area serves as key support because it represents the lowest point formed after the extreme sell-off. If this level is breached, the long-term bullish structure could turn fully bearish. The relationship between price and the 100-day moving average (MA) indicates that the medium-term trend remains under pressure. The 100-day moving average (MA), which was previously rising, has now begun to decline with a fairly clear slope. The price's position below the 100-day moving average (MA), indicating that buyers have not yet taken control of the market. A similar situation is also seen at the 200-day moving average (MA). Although the 200-day moving average (MA) is still rising, its slope is beginning to slope downward. This indicates that the long-term trend is losing momentum. In technical analysis, this condition often serves as a transition phase before the market determines its next direction. Interestingly, after a sharp decline in late July, the price has managed to form a gradual recovery pattern. The price movement from the 155.22 area to 159.54 indicates accumulation by market participants. However, this increase has not been able to break through the 100-day moving average (MA), so it can still be categorized as a correction within the larger trend. The latest price structure shows a horizontal consolidation pattern. Over the past few days, USD/JPY has moved within a relatively narrow range between 158.80 and 159.54. This pattern usually indicates that the market is awaiting a new catalyst before determining its next direction. If the price breaks through 159.54 and holds above that level, the opportunity for strengthening towards 160.89 will increase. If the resistance at 160.89 is successfully broken, the next target is the 161.62 area, adjacent to the 200-day moving average (MA). A breakout of the 200-day moving average would be an early signal that a bullish trend could potentially re-establish itself. Conversely, if the price fails to hold above 159.54, selling pressure could re-escalate. A decline towards 158.80 is the most realistic short-term scenario. If this support level fails to withstand selling pressure, the price could potentially retest the 157.66 area. A deeper decline could send USD/JPY towards 156.71 or 155.22. Psychologically, market participants appear to remain cautious. The sharp decline at the end of July left significant market trauma, so any uptrend tends to be exploited as an opportunity for profit-taking. On the other hand, the emergence of a series of higher lows since early August indicates a resurgence of buying interest. Therefore, the movement of the next few candlesticks will significantly determine the direction of the subsequent trend. The price position between the 100-day moving average (MA) above and the horizontal support below indicates that the market is in a directional phase.