The USD/JPY pair has been trending bearishly for several days, trading within a descending channel. However, the latest 4H price action shows signs of a possible bullish breakout attempt near 155.35.
Key Indicators from the Chart:
- Timeframe: 4-hour (H4)
- SMA 9 and 20 Used
- Price Near Top of Channel
- Downtrend Since Nov 21
- Support Near 154.40–154.60
- Resistance Around 156.00–156.20
📊 Technical Breakdown
🔻 Trend Structure
The chart clearly shows:
- Lower highs
- Lower lows
- Strong descending channel (highlighted in blue)
But now:
- Candles are testing the upper trendline
- SMA 9 is attempting to cross above SMA 20
- Momentum is shifting
This indicates weak bearish pressure and likely bullish breakout chances.
🧭 Key Levels to Watch
| Price Zone | Importance |
|---|---|
| 156.00 – 156.20 | Major resistance ceiling (break = bullish trend reversal) |
| 155.20 – 155.40 | Current price zone (market indecision) |
| 154.60 – 154.80 | Important support line |
| 154.40 | Channel bottom – strong support |
📈 Bullish Scenario (If Breakout Occurs)
If price closes above 156.00, the trend structure may flip bullish.
Next targets could be:
| Target Level | Reason |
|---|---|
| 156.50 | Minor resistance |
| 157.20 | Swing level |
| 158.00 | Psychological level |
📉 Bearish Scenario (If Rejection Happens)
If price fails to break above the upper channel and gets rejected from 156:
| Target | Reason |
|---|---|
| 155.00 | Short-term support |
| 154.60 | Key support |
| 154.40 | Channel bottom – possible bounce |
📌 SMA (9 & 20) Analysis
- SMA 9 is below SMA 20 through most of the trend → confirms bearish momentum
- Now SMA 9 is flattening and trying to cross upward, meaning sellers are losing strength.
This is an early bullish reversal signal.
🎯 Trading Point of View
- Aggressive traders may look for breakout entries above 156.00.
- Conservative traders may wait for confirmation candle above channel.
- Bears can consider selling below 154.60 if breakdown happens.
📅 Fundamental Note
There are upcoming U.S. Events (shown as icons on the chart) – news may create volatility.
So plan trades with stop-loss and avoid over-leverage.
🤔 Frequently Asked Questions (FAQ)
❓ Is USD/JPY trending bullish or bearish now?
It is bearish, but showing bullish breakout potential.
❓ What is the strongest resistance now?
Around 156.00–156.20.
❓ If breakout happens, what’s the next target?
Next key level is 156.50 and then 157.20.
❓ Should I buy now?
Entry depends on strategy:
- Buy only if close above 156 (confirmation).
📝 Final Thoughts
The USD/JPY chart shows a classic descending channel setup.
A breakout above resistance could start a fresh bullish wave,
while rejection may drag price back to the channel's bottom.
Stay patient, watch the levels, and trade based on confirmation.
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