FX.co ★ absh kaat | USD/JPY

I observe that the USDJPY pair has failed to produce a convincing breakout from the middle of its established trading range as defined by the envelope indicator, and I interpret this behavior as a clear sign of market indecision and balance between buyers and sellers at current levels. I assess the current probability distribution as nearly symmetrical, meaning I see an equal 50/50 chance that price action may either extend upward toward the resistance area near 157.21 or decline toward the support zone around 154.10, which reinforces my cautious stance. I recognize that the absence of strong momentum or expanding volatility suggests that institutional participants are likely waiting for a clearer directional signal, and I therefore avoid aggressive entries in the middle of the range. I acknowledge that my overall directional bias remains bearish, and I prefer to align my trading decisions with selling opportunities rather than attempting to catch uncertain upward movements. I plan to look for a potential sell setup if the price rallies toward the 157.21 resistance area, as I would interpret a rebound or rejection from this level as confirmation that sellers are defending the upper boundary of the range. I would expect such a rejection to be supported by weakening bullish candles, long upper wicks, or momentum divergence, which would strengthen my confidence in initiating a short position. I also consider an alternative bearish scenario where a four-hour candlestick closes decisively below the 155.66 level, as I would treat this as a sign that sellers are regaining control and that downside continuation is becoming more probable. I would use this bearish close as a trigger to enter short positions with the same downside objective, as I believe the market could then accelerate toward the 154.10 support zone. I remain aware that until either resistance or support is clearly tested, price may continue to oscillate within the range, and I therefore emphasize patience and disciplined execution. I conclude that my strategy is focused on selling strength or selling confirmed weakness, as I aim to manage risk effectively while positioning myself for a potential move toward the lower boundary of the USDJPY trading range.

I consider the recent decline in the US dollar following Wednesday’s US interest rate cut to be a completely natural market reaction, and I therefore do not interpret Thursday’s rebound from the 156.10 area as any form of manipulation or artificial price action. I recognize that the overall situation remains quite complex, because despite the initial dollar weakness, price action shifted back toward growth on Thursday, reflecting the fact that the Japanese yen is also showing no urgency to strengthen. I note that the yen continues to trade near its historical lows, and I believe this structural weakness limits the downside potential for USDJPY in the short term. I observe that on the H4 timeframe, the technical picture appears relatively orderly and constructive, as the pair managed to break above the downward channel earlier this week. I interpret this breakout as an important technical signal that suggests the prior bearish pressure has weakened and that buyers are gradually regaining control. I acknowledge that the subsequent corrective move was far from elegant, and I admit that the pullback looked unstable and emotionally driven, but I see signs that the market has now begun to stabilize. I believe that this stabilization creates conditions where renewed upward movement can develop with greater confidence. I evaluate the current price structure and conclude that entering a long position around the 155.50 level does not look unreasonable from a risk-to-reward perspective. I remain comfortable with this idea because I see the broader trend structure on the H4 chart favoring further upside continuation rather than a sustained reversal. I emphasize that my upside targets have not materially changed, as I continue to focus on the 161 level as my primary objective. I expect price to approach the 157.30 area as part of its path toward that higher target, and I am prepared to remain patient while the market works its way there. I acknowledge that the grid levels could be recalculated and potentially optimized, but I consciously choose to stick with the current framework. I prefer consistency in my analysis, and I genuinely like the 161 level as a realistic and technically justified goal, so I am content to let the plan remain unchanged.