USD/JPY Forms Bullish Reversal Pattern at Key Support

In today’s technical analysis, we turn our attention to the USD/JPY currency pair, which appears to be staging a meaningful recovery after several days of strong bearish pressure. What makes this rebound especially interesting is the location and structure behind it — it’s happening precisely at a critical horizontal support, marked with yellow, which has held firm through past selloffs.

This area has now sparked a technical reaction, and not just any reaction — the bounce is forming an inverse head and shoulders pattern, highlighted with orange rectangles. This classic reversal formation often marks the end of a downtrend and the beginning of a bullish phase.

Importantly, the price has already broken above the red neckline of this inverse head and shoulders setup, which activates a buy signal. The breakout adds technical credibility to the bounce and suggests that buyers are regaining control.

But there’s more: Alongside the neckline breach, the USD/JPY has also cleared a descending trendline (marked in black), which had been connecting the lower highs since June 25th. The breach of this trendline confirms a break in the short-term bearish structure.

Additionally, price is breaking above a local horizontal resistance at 143.8, marked in pink. As long as USD/JPY remains above these broken resistance levels — the red neckline, black trendline, and pink horizontal barrier — the technical sentiment is firmly bullish.

On the contrary, if the pair falls back below these key levels, especially the yellow support zone, that would invalidate the current bullish setup and signal a potential false breakout — a strong case for renewed selling pressure.

Source: https://www.axiory.com/analytics/technical-analysis/usd-jpy-forms-bullish-reversal-pattern-at-key-supp