USD/JPY H4 Analysis: A Bullish Reversal or Just a Temporary Recovery?

USD/JPY is showing signs of short-term bullish momentum, but the bigger picture still calls for caution.

Here are the key observations from my latest technical analysis:

📈 1. Inverse Head and Shoulders
The chart shows a potential inverse head-and-shoulders pattern, suggesting a possible bullish reversal. However, price is still below the key neckline, so confirmation remains important.

📊 2. Momentum Indicators
• ADX: 31.18, indicating a strong trend.
• +DI: 24.44 vs. -DI: 9.74, showing that buyers currently have the directional advantage.
• EMA 50: Around 157.600, acting as an important near-term resistance level.

🎯 3. Key Price Levels
• Resistance: 157.600, followed by 157.850–158.000.
• Major neckline resistance: 159.024–160.381.
• Support: 156.570–156.066.
• A break below 155.966 would invalidate my proposed long trade setup.

🚀 Bullish Scenario:
A sustained H4 close above the EMA, followed by a successful breakout and retest, could strengthen the case for further upside.

⚠️ Bearish Scenario:
Rejection at resistance and a break below the right shoulder could signal renewed selling pressure.

One more factor deserves attention: upcoming Federal Reserve and Bank of Japan decisions could increase volatility and create sharp moves in USD/JPY.

My takeaway: A promising technical setup is not the same as a confirmed trade. Price action, risk management, and macroeconomic context must work together.

The key question is whether buyers can turn this recovery into a sustainable reversal.

What is your view on USD/JPY? Are we seeing the beginning of a bullish reversal, or is this just a temporary pullback within a broader downtrend?

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