The USD/JPY pair has shown a strong rebound and broken through the 38.2% retracement level from 161.94 to 139.57 at 148.11. This indicates that the fall from 161.94 may have already come to an end. The rise from 139.57 is now being viewed as the second leg of a corrective pattern from 161.94. As such, the initial bias for the week remains on the upside, and we may see a further rally towards the 61.8% retracement level at 153.39.
If the price falls below the minor support level at 145.91, the intraday bias could turn neutral once again. Looking at the bigger picture, the price actions from 161.94 are considered a corrective pattern from the rise starting from 102.58 (the 2021 low). This suggests that we are in a medium-term consolidation phase, with the range set between the 38.2% retracement level at 139.26 and 161.94. However, a sustained break below 139.26 could lead to a deeper decline towards the 61.8% retracement level at 125.25.
In the long term, it is still too early to determine if the uptrend from the 2011 low of 75.56 has come to an end. Nonetheless, a medium-term corrective phase seems to have begun, with a possibility of a significant correction towards the 55 M EMA, which is currently at 133.73. This indicates that there is still some uncertainty regarding the long-term trend of the USD/JPY pair, and traders should proceed with caution.
As forex traders navigate the market, it is essential to closely monitor the price movements and key support and resistance levels. Keeping a close eye on economic indicators and geopolitical events that could impact the currency pair is also crucial. Additionally, employing risk management strategies and staying informed about market developments can help traders make well-informed decisions and navigate the dynamic forex market successfully. By staying informed, adaptable, and disciplined, traders can enhance their trading performance and capitalize on opportunities in the forex market.
