USD/JPY - BULLISH REVERSAL IN PLAYThe recent price action on the USD/JPY 30-minute chart confirms a Change of Character (CHOCH), marking a significant shift in market structure from a bearish trend to a potential bullish reversal. This CHOCH is a critical technical signal indicating that the previous downtrend has lost momentum and that buyers are beginning to take control of the market.
Leading up to the CHOCH, the market had been consistently forming lower highs and lower lows, respecting a well-defined trendline resistance. This downtrend was also characterized by multiple Breaks of Structure (BOS) to the downside, reinforcing the bearish sentiment. However, as price approached a strong support zone, it began to consolidate, suggesting a buildup of buying interest. Eventually, price broke above the most recent lower high, completing a clear CHOCH — the first structural sign that the bearish trend had been invalidated.
This CHOCH is further validated by the break of the descending trendline, a strong bullish impulse candle, and a reaction from the support zone, all of which add confluence to the idea of a trend reversal. Additionally, the breakout occurred with noticeable momentum (as implied by the volume indicator icon on the chart), further reinforcing the likelihood of continued upside movement.
With the CHOCH confirmed and the previous bearish structure broken, the market is now positioned to seek liquidity and inefficiencies above, specifically targeting the next key resistance zone located around 149.600 to 149.900. This area represents a prior supply zone and contains a “weak high,” which often acts as a price magnet during bullish reversals, as the market seeks to test or sweep liquidity from those levels.
In conclusion, the CHOCH marks a decisive shift in direction, and the market structure now supports a bullish move. As long as price holds above the recent low and continues to print higher highs and higher lows, the next likely destination is the resistance zone, where traders should watch for either profit-taking opportunities or signs of further continuation.
