USD/JPY Shows Sharp Decline – Wave 3 of Bearish Impulse in Play

After hitting January 2025 highs, USD/JPY reverses sharply, signaling potential further downside while a corrective wave rally may provide resistance near 154–155.


USD/JPY is pulling back sharply after reaching the January 2025 high resistance within the 5th wave of its previous bullish cycle. This reversal is not unexpected, and the current strong downward extension appears to be wave 3 of a five-wave bearish impulse, suggesting there could still be room for further weakness.

Traders should, however, be cautious of a potential wave 4 corrective rally, which could push the price back toward the recently opened gap and the former swing lows and highs in the 154–155 area, a zone likely to act as resistance in the coming days.

Overall, the structure indicates a continuation of the bearish trend after the corrective phase, so monitoring for retracements and key resistance levels will be essential for positioning.