The Bollinger Bands also seem poised for an expansion.

USD/JPY Today's Market Analysis

【Daily Chart】

【4-Hour Chart】

USD/JPY Daily Chart

Analysis In the daily chart, we saw yesterday continue to struggle with the upside, suggesting a dominant bearish sentiment, and the market posted a fairly long bear candle, indicating the outlook to be 'flat to bearish' for today.

The question remains: Will there be a slight rally before another round of selling, or will the market directly descend?

The Tokyo session will be in the spotlight!

With sales starting to kick in post 8 a.m., it seems we’re looking at an initial downward movement.

USD/JPY 4-Hour

Chart Analysis Looking at the 4-hour chart, there's been a modest rebound after a decline to the Bollinger Bands' -2σ zone, but this bounce is weak when taking into account the daily and 60-minute charts, suggesting a potential 'flat to bearish' trend.

The Bollinger Bands also seem poised for an expansion.

If Tokyo traders break through and push below 142 yen, we could see selling pressure intensify.

USD/JPY 60-Minute

Chart Analysis In the 60-minute chart, the Bollinger Bands and the moving averages are trending downwards, and we are currently seeing a band walk around the 10EMA and the -2σ level, which is also tied up in a descending triangle formation.

This suggests that we should maintain a 'flat to bearish' approach.

If the rate slips below 142 yen to somewhere around 141.70 yen at the -2σ, be wary of further downward movement should the rebound be weak.

However, if it climbs and exceeds about 142.30 yen at the 10EMA, be aware of the potential for a short-term corrective rally.

Tokyo Session Strategy

Expectations based on fundamentals – as we proceed past the holiday events, overseas players will start entering their Christmas holidays.

After the Bank of Japan's meeting, there might be a temporary shift to a weaker yen but it’s likely to return to a stronger yen afterward.

Speculation is that with the Federal Reserve likely to shift towards a rate decrease next year, the interest rate differential between Japan and the U.S. will narrow, potentially leading to a stronger yen.

It seems the yen's strength might continue through the end of the year. 

Today's USD/JPY Forecast

With the ongoing trend towards a stronger yen, the general movement seems to be in a downward trend, hence today's perspective remains 'flat to bearish', aiming for sell-on-rallies in the minor timeframes.

When the market opens, it’s essential to align with the flow, and should you feel there’s a diminishing of the high in the lower timeframes (1-minute or 5-minute chart), consider taking a short position.

Also, after reaching the middle line of the 15-minute chart or the +2σ/+3σ of the Bollinger Bands, going short could also be a viable strategy.

USD/JPY Today's Forecasted Range

Upper resistance points are around 142.15 to 142.20, near 142.30, between 142.38 to 142.43, from 142.57 to 142.60, and approximately 142.70 to 142.80.

Lower support points are close to 142.00, near 141.75, around 141.65, from 141.55 to 141.50, approximately 141.30, between 141.20 to 141.15, and from 141.05 to 141.00.

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