Key Observations and Analysis
The Return to a Key Level: The most striking feature of this chart is the return of the price to the 148.00 level. This is a critical psychological and technical support/resistance level. Throughout August and into early September, this level acted as a strong resistance, repeatedly rejecting upward price movements. After a significant breakout in early September, the price has now returned to this area, but this time from above.
Bullish Breakout and Bearish Reversal: The chart shows a powerful bullish breakout in early September, where the price soared past the 148.00 level and reached a new high around 148.40. However, this upward momentum was unsustainable. We then see a sharp bearish reversal, a clear sign that sellers took control and aggressively pushed the price down.
Current Price Action: The price has now dropped back to the 148.00 level. This is a crucial moment for the market. It will test whether this former resistance level will now act as a new support. The recent rebound from this level suggests that buyers are attempting to defend it.
Trading Outlook and Future Targets
The future direction of the USD/JPY pair depends on whether the 148.00 level holds as support.
Bullish Scenario: If the 148.00 level holds and the price successfully bounces, we can expect a renewed push towards 148.20 and possibly a re-test of the recent high at 148.40. A successful defense of this level would signal that the broader bullish trend remains intact.
Bearish Scenario: If the price breaks below the 148.00 level with conviction, it would invalidate the current support and signal a strong bearish move. In this case, the next logical target would be the lower support levels around 147.60 and 147.20.
Ultimately, traders should be vigilant. The 148.00 level is the key to understanding the next move for USD/JPY. A clear break in either direction will likely dictate the short-term trend.