【Dollar-Yen】A pullback may be forming — but for now it rebounds, then eyes a level in the mid-158s

Dollar/yen is range-bound in the 159 yen area.

After tagging 160 yen, it has been inching lower. Looking at the daily chart, it seems a pullback may be coming soon.

But I don’t think it will collapse suddenly. I will write my assessment in order.

First, the daily chart is in a “pre-pullback” pattern

The current dollar/yen. It has been repeatedly bounced just short of 160 yen, making upside heavy.

Candle momentum is not continuing to the upside. This is a sign that buying is starting to falter.

The short-term moving averages are also near a turning point. If they turn downward from here, the pullback could intensify.

Longs should be aware of this situation.

But I still expect a rebound for now

You might think, “Then just go short plainly.”

It isn’t that simple.

Even if it goes down, there will first be a daily-level pullback buying. The market has risen this far. It won’t break decisively on a single pullback.

So the initial decline is seen as being absorbed by a rebound. Buying comes in at the dip, and it recovers temporarily.

If you panic and chase shorts here, you’ll be caught by that rebound. That’s how I used to lose a lot in the past.

After that rebound, watching the 158.1x area

The problem lies beyond that.

Even if there is a rebound, I don’t think the uptrend will resume. The rebound will be sold, and it will fall further.

The target is the low 158s.

This is a level that has recently served as support several times. It’s a point where sellers take profits and buyers step in—an important, watched level.

First, I’m watching for another test move toward this area.

Strategy for next week

If you hold for a longer period, my basic stance is this.

・View shorting as the core around the high 159s to around 160
・When the initial decline rebounds, don’t chase it; wait and see
・If it comes to the low 158s, consider taking profits
・Short-term longs to catch rebounds are only for a short duration. Don’t stay long
・When the direction isn’t clear, don’t force positions

Pushing hard when the market isn’t moving is the fastest way to be wiped out. Enter after the pattern is clear. There’s no need to rush.

Summary

・Range-bound around 159 yen; heavy near 160
・Daily chart shows a pre-pullback pattern. Longs, beware
・However, the initial decline should be seen as a pullback rebound on the daily chart
・That rebound will likely be sold, testing the low 158s
・Core stance is short. Rebound plays are only short-term

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