USD/JPY) back down Trend Read The caption

308
SMC trading point update




Technical analysis of USD/JPY (U.S. Dollar / Japanese Yen) on the 3-hour timeframe, anticipating a rejection from a descending trendline resistance and a move down toward key support levels.


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Analysis Overview:

Trend Bias: Bearish correction expected

Structure: Price is reacting at a descending trendline, which has held as resistance on multiple occasions.

Indicators:

EMA 200 (144.756): Price is currently above, but projected to break below it.

RSI (14): Overbought at ~74, signaling potential for a reversal.




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Key Technical Components:

1. Descending Trendline Resistance:

Price is approaching/has touched a well-respected downtrend line, marked by three strong rejections (red arrows).

This trendline has consistently capped bullish moves, indicating strong seller interest.



2. Bearish Reversal Expectation:

The projected path suggests a potential fake breakout or double-top, followed by a steep decline.

A two-stage drop is anticipated, with price first targeting the EMA 200 zone, then extending lower.



3. Target Points:

First target: Around 145.244, near EMA 200.

Final target: 143.048, aligning with the key support zone (highlighted in yellow), where price previously bounced.



4. RSI (14):

Currently overbought (73.29), signaling a likely retracement.

Prior peaks at this level led to notable corrections.





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Trade Setup Idea:

Parameter Level

Entry Near current price (~146.85) if bearish pattern confirms
Stop-Loss Above trendline (~147.30–147.50)
Target 1 145.24 (EMA 200 zone)
Target 2 143.05 (Support zone)


This setup offers a high-probability short opportunity if resistance holds.


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Risk Factors:

Upcoming economic events could trigger volatility (news icon marked).

A clean breakout and close above the trendline (~147.50+) would invalidate this bearish thesis.




Mr SMC Trading point
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Summary:

The analysis suggests a potential USD/JPY reversal from a descending trendline, supported by overbought RSI and prior rejections. The bearish projection targets a move toward 143.048, following a dip below the EMA 200 level at 145.244.




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