USDJPY in the 153 yen area is a resistance-rebound zone. Even if it breaks lower, the reason I view it with a long bias

The current USD/JPY is viewed as having an advantage for long positions in the 153 yen range.

Of course, I don’t think it will rise straight up from here. There is a real possibility of dipping below 153 yen to test the downside. Even so, considering the sharp downside move that occurred in a short time, I judge that it is easier to aim for a rebound than to chase further losses by selling.

On the daily chart as well, the pace and magnitude of the decline are large, and selling is heavily biased. I’m not saying a rebound will absolutely occur, but we are entering a level where a pullback should be watched for.

From the 160s to the 153s. Too much selling in a short period

First, please look at the current 1-hour chart.

The USD/JPY has been sold from the 160s and is now down into the 153s. The decline ranges about 7 yen. Although there have been small retracements along the way, overall every rebound has been sold into, and the market has tilted strongly in one direction.

Looking at charts like this, it becomes hard to see anything other than further downside. Short positions seem correct, and one would want to sell if there is a bit of a bounce.

However, I want to be careful after big moves.

As the decline continues, new selling increases, while those already short are nearing their take-profits. If, at the last phase of forced selling, buyers disappear, even a small rebound can push the price sharply higher.

It’s not that you sell because it’s going down; you look at how far it has already been sold.

Now is the time when that perspective is needed.

The 153s: not a place to sell, but a place to wait for a rebound

What I’m watching is a zone from the low to mid-153s.

In the current chart, there have been several tests of the downside in this area, but the lows have not been updated all at once. The downtrend is losing its momentum, and in the short term a buyback has begun to enter.

However, I will not declare the current price as a bottom. After strong declines, it is common for price to poke below a support band, trigger stops, and then rebound immediately afterward.

Therefore, even if we break 153 yen, there is no need to abandon a long scenario just for that. If it recovers back into the 153 yen area after breaking down, it can actually make it easier to shake out selling and target the rebound.

What matters is not whether it breaks below, but where the price returns after breaking below.

Even on the daily chart, a situation to be wary of a rebound

Not only on the hourly chart but also on the daily chart, the downward momentum remains quite strong. Because it has fallen sharply in a short period, short positions tend to bias toward one direction.

It is dangerous to think, “it’s oversold, so it must go up.” An oversold condition can persist for a long time.

Still, if you’re considering new shorts now, you would be selling after a large decline. The risk of a rapid rebound against the potential downside is increasing compared to the potential low you can take.

On the other hand, going long means pulling down to enter, and if you set the point where the scenario would fail, you can limit losses while aiming for a rebound in price movement.

Considering this risk-reward balance, I favor longs over shorts.

If you’re aiming, don’t try to catch the exact bottom at a single price

I’m looking for long opportunities, but I don’t plan to enter with a large position at the current price.

It is true that we are in a strong downtrend. Since there is a possibility of one more move down before a rebound, trying to catch a bottom with a single price would risk getting crushed by a slight dip.

If anything, enter in small lots and stagger your entries.

・Pickup the first rebound in the 153 yen range
・If there is a brief breakdown, confirm a return to the 153 yen range before adding
・First target for the rebound is in the high 153s to 154s
・If the rebound is strong, look at the potential upside above that

Instead of aiming for a large rise from the start, think of catching the buyback of the oversold portion.

Don’t buy more emotionally just because it has fallen. Decide in advance how far you will allow the price to drop and under what conditions you will add.

Accumulated buying on declines and random averaging down are different things.

Conditions to discard this long scenario

Because just a bullish talk is not sufficient, I will also write about where I could be wrong.

After breaking below 153 yen, if it cannot rebound quickly and the returns are sold again multiple times, and the price extends to the low 152s, making 153 yen a clear resistance rather than support.

If it progresses that far, the premise of “a temporary break below followed by a rebound” collapses. In that case, do not cling to long positions; shift your view momentarily.

Believing in longs and continuing to buy regardless of what happens are two different things.

Before entering, decide where your view would be wrong.

Positions without that plan become wishes rather than analysis.

Summary

The USD/JPY fell sharply from the 160s to the 153s in a short period. The current zone in the low to mid-153s shows signs that the downward momentum is weakening, and I see an advantage in going long to target rebounds rather than chasing new lows by selling.

Even if it temporarily breaks below 153 yen, if it quickly rebounds, the scenario continues. In fact, the recovery after stopping losses can become a reason for a rebound.

However, rebounds are not mandatory. Therefore, do not try to catch a bottom at a single price; split your entries with small lots and abandon the view if 153 yen becomes a clear resistance.

Instead of praying for oversold conditions, enter at places likely to rebound, with sizes small enough to fail.

This is what I am thinking about the current USD/JPY.

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