Bearish Correction May Intensify Should MACD Histogram Gain Structural Depth

Forex

Economic

Summary:

This sharp decline indicates that the bullish drive has been entirely exhausted, leaving ample "runway" for further downside move.

SELL USDJPY

EXP

TRADING

155.757

Entry Price

154.660

157.000

156.047 -0.078 -0.05%

0.0

Pips

Flat

154.660

Exit Price

155.757

Entry Price

157.000

In Japan, the normalization of monetary policy faces mounting political headwinds. During a high-stakes meeting on February 16, Prime Minister Sanae Takaichi voiced significant reservations to Bank of Japan (BoJ) Governor Kazuo Ueda regarding the feasibility of further short-term interest rate hikes. This burgeoning political opposition complicates the BoJ's exit strategy, as the coordination between the central bank and the administration becomes increasingly delicate. While Governor Ueda characterized the exchange as a broad discussion on economic developments—clarifying that no specific policy mandates were issued—the market remains wary of how this friction may delay the central bank's timeline for further tightening.

Simultaneously, Finance Minister Satsuki Katayama indicated that the Japanese government is meticulously evaluating the implications of the recent U.S. Supreme Court ruling on tariffs. Katayama reaffirmed Japan's commitment to its massive investment package directed toward the United States; however, she noted that persistent U.S. tariffs on automobiles continue to act as a significant headwind, maintaining a high degree of trade uncertainty for Japanese manufacturers and weighing on the long-term outlook for the Yen.

Across the Pacific, Federal Reserve Governor Stephen Miran provided a cautiously optimistic assessment of the U.S. financial landscape. Miran posited that while private credit has encountered occasional "potholes," the sector remains structurally sound with stable pricing. A vocal proponent of the regulatory agenda championed by Governor Bowman, Miran argued that the banking sector is currently over-regulated, a factor he believes is stifling essential credit creation. While he acknowledged that recent labor market data has "significantly improved," he cautioned that it is still premature to signal an "all-clear" for the broader economy. Notably, Miran dismissed immediate concerns regarding U.S. inflation, suggesting that the long-term integration of Artificial Intelligence (AI) will eventually prove to be "profoundly disinflationary."

The minutes from the January Federal Open Market Committee (FOMC) meeting reinforced this patient, data-dependent approach. Several members expressed that maintaining the current interest rate corridor is appropriate for the time being, leaving the door ajar for future adjustments only if inflation demonstrates a sustainable move toward the 2% target. According to the CME FedWatch Tool, market participants have pivoted toward expecting a prolonged pause through March and April. Simultaneously, the probability of a 25-basis point rate cut in June has notably diminished. This hawkish-leaning patience is supported by a remarkably resilient labor market, where weekly jobless claims recently came in at 212,000, outperforming the 215,000 forecast and providing the Fed with the necessary breathing room to remain restrictive. Bearish Correction May Intensify Should MACD Histogram Gain Structural Depth_1

Bearish Correction May Intensify Should MACD Histogram Gain Structural Depth_1

Technical Analysis

From a technical perspective, USD/JPY has failed in its recent impulsive attempt to establish a fresh "higher high." The bullish drive stalled upon reaching the 156.81 handle, subsequently initiating a corrective move. A local resistance zone solidified near 156.48, which effectively triggered a bearish rejection that now threatens a deeper extension toward the 154.65 support level.

This target level is of high technical significance as it aligns with the 0.50 Fibonacci retracement—a zone where corrective moves frequently find their terminal point. Furthermore, the 200-period Moving Average (MA), currently situated at 154.91, is tracking closely to this demand zone, likely providing significant dynamic support. Along the downward trajectory, the 100-period MA at 155.58 will serve as the immediate bearish objective and dynamic hurdle for the price.

Our analysis of momentum oscillators reinforces the bearish thesis. The Relative Strength Index (RSI), which struck an overbought reading of 74 during the February 25 peak, has plummeted to the 38 level. This sharp decline indicates that the bullish drive has been entirely exhausted, leaving ample "runway" for further downside movement before entering oversold territory. Simultaneously, the MACD is currently transitioning into bearish territory. At the time of writing, the signal lines are executing a downward crossover of the neutral threshold, while the histogram is printing progressively deeper bearish bars. Should these histogram bars continue to gain structural depth and "body," we anticipate an acceleration in selling pressure, potentially driving the pair through the aforementioned support levels toward a more profound structural correction.

Trading Recommendations

Trading direction: Sell

Entry price: 155.71

Target price: 154.66

Stop loss: 157.00

Validity: Mar 10, 2026 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Bearish Correction May Intensify Should MACD Histogram Gain Structural Depth

Technical Analysis

Risk Disclosure