The USD/JPY pair has been exhibiting a clear downtrend pattern, as evidenced by its movement within a falling price channel on the 4-hour chart. This technical formation suggests that the pair is still in a downward trajectory from its recent high of 161.95.
![](https://www.forexcycle.com/wp-content/uploads/2024/20240723_USDJPY_1.png)
Bearish Outlook
As long as the price remains confined within this channel, we can expect the downward movement to persist. Here are the key levels to watch:
- Immediate support: 155.63
- If 155.63 breaks: Watch for a move towards 154.50
- Next target: 153.90 area
Potential Bullish Scenario
While the current trend is bearish, traders should also be prepared for a potential reversal. Here’s what to look for:
- Key level: Channel resistance (upper boundary of the falling channel)
- If price breaks above the channel: Next resistance at 157.86
- Above 157.86: Watch for a push towards 158.86
Trading Strategy
- Short positions: Consider entering short positions while the price remains within the channel, with targets at 154.50 and 153.90.
- Long positions: Wait for a clear break above the channel resistance before considering long entries, with initial targets at 157.86 and 158.86.
Conclusion
The USD/JPY pair is currently showing strong bearish momentum within a falling price channel. While the downtrend remains intact, traders should stay alert for any potential breakout above the channel resistance, which could signal a shift in the short-term trend.
Remember to always use proper risk management techniques and consider multiple timeframes when making trading decisions based on this analysis.