The USD/JPY broke below 155.22 and formed a weekly downtrend for the first time in six years → Will a chain of long profit-taking declines continue down to 112 yen?

＜9/8 7am USD/JPY (weekly) situation＞

●broke below yesterday’s 155.22 low,forming a weekly downtrend for the first time in 6 years!

●This is an incredibly impactful event,a break above the 200SMA that has held since 2021 six years ago would tempt long-term holders of a two-way strategy—holding for forex gains and daily swap points—to sell; a shocking development that could force such traders to reconsider their long-term plans, andthere is a possibility of dropping toward around 23.6% retracement near 112 yen (even before 2021’s low) 盈.

＜Impact on two-way traders＞

●> The above chart shows this morning’s USD/JPY (weekly) chart, where a weekly downtrend (sell(1S)) was formed for the first time in six years. （on the right red star area）

●Before that, the downtrend formed at the right-side red star Sell(3S) and sell(1S) locations,a truly six-year rare event.

●After breaking above the Black 200SMA in 2021,from 2021 fiscal year through the current 2026 fiscal year,In USD/JPY (weekly), candlesticks have stayed above the 200SMA,from New Year’s onward, buying USD/JPY (going long) from autumn to year-end and holding the position long-term to earn both forex gains and daily swap points—two-weapon trading has been executed.

●That trade’s 2021–2026 status is summarized in the yellow box below.

●‘Take profit (withdrawn)’ entries indicate positions bought on a dip (long) that came back to their entry point by profit-taking; the trader’s margin returns to full state,and from 2022–2024 the margin that returned (the value range of the white-outlined box moving up and down) was used to perform a higher timeframe moving average pullback buy,(A)→buy(3B), (B)→buy(2B), (C)→buy(3B), (D)→buy(2B) actions.

●(E),then confirmed that instead of a pullback buy, she sold from feeling sell(1S) to a rebound.

●This pattern is also observed by traders holding buy(2B) and buy(3B) positions who are considering 23.6% retracement supports on weekly closes and whether to add to long positions, potentially yielding red line or green line-like price actions.

●Red dotted line consideration: the 23.6% retracement resistance for sell(1S) currently at 155.552; if the close moves above this line, the short position sell(1S) could take profits and push price toward around the 23.6% retracement support near buy(2B), and a move similar to wave blue 1 toward red high 2 might form sell(2S) and prompt a decline. (Personally, I’d prefer a straight move breaking below the black 200SMA rather than this pattern, and I’m watching whether 155.552 can be broken with a weekly close for continued decline.)

＜Perspective of buyers/long positions (want to take profits)＞

●From 2021 to 2026, traders holding long positions to gain both forex profit and daily swap points are lined up on the chart from 2021 buy(1B) to the current price, all in the green with unrealized profit.

●These people earned swap points daily and their positions were in profit.

●The thinking is that they want to avoid negative moves!Many will likely place stop-loss orders that ensure the net P/L stays at positive (at least offsetting the swap gains) to guarantee forex gains stay positive.

●Thus, as in the above figure, there is nearly a 50-yen price range (155 to 107) with stops lined up without gaps above and below, meaning the upper edge of the colored boxed area represents the resting low of buy/long positions currently funded, and the box height roughly corresponds to the amount of capital. Weekly traders are mostly long-only and do not reverse to short, but if margins returned allow, reversing to short could illustrate the lower edge of the box, so such reversals could be utilized.

● However,in six years, since the black 200SMA held above, a sudden drop has always found support at some moving average and rose again, so some traders may avoid placing stop-loss orders that would cut profits too much.

someone new sells (shorts) and prices start to fall,there is a high likelihood of cascading stop-loss hits causing a sharp drop.

this stop-loss is a profit-taking stop, not a cut loss, and it’s a perfectly fine trade for a long position holder）

●In the above left sidethe current position size is about four times larger than then, and the price movement during the Lehman crisis might be a reference

＜Comparing Lehman crisis to current scale＞

●The area in the left blue dotted frame (A)(B)(C)(D) shows the buy/long positions accumulated one year before Lehman; the area in the right green dotted frame (A)(B)(C)(D) shows the buy/long positions accumulated from 2021 to the present (2026);roughly four times (≈4.147x) as large confirming the scale.

●Evaluating the Lehman-era computer processing power the current AI-capable computer processing power and this fourfold increase in long-position volumes from 107 to 155 yen—an approximately 50-yen gap—will require enormous stop orders; how fast these can be processed will be exciting to see.

●I started FX during the Lehman crisis; back then, an FX class taught that before Lehman, swap-trading was dominant and profitable, but during the Lehman crisis such strategies no longer worked and forex gains were necessary to profit.

●Will the same happen again? will traders who were knocked out a year before Lehman crisis rebuild a system to rebound? this is the ongoing cat-and-mouse battle I’m considering.

＜In conclusion＞

●We don’t know what price action will unfold, but it looks like a fun market after a long time, and I’m looking forward to it♪