Buying USDJPY from 162.355

Today, the 15-minute chart tells a clear story: USDJPY is firmly in bullish territory. After a sharp nosedive on July 14 that carved out a local bottom near 161.245, the pair staged a spectacular V-shaped recovery. Since then, it has shown textbook uptrend behavior, with consistently rising highs and lows—a telltale sign that buyers have the edge.

But here's the catch: the pair is currently facing a significant ceiling, i.e., the historical peak at 162.63. In fact, for the past two days (July 20–21), the price has been consolidating beneath this threshold, repeatedly testing the 162.49–162.56 zone without breaking through. To put it simply, the market is clearly holding its breath.

On the downside, support levels are stacked below, with the nearest at 162.355, followed by 162.215 and 162.01.

Volume tells an interesting story. The heaviest spikes occurred during the July 14 crash (a classic capitulation) and the aggressive buying frenzy that played out in its wake. But now, as the pair hovers near these highs, volumes have noticeably dried up. This quiet period before the storm often signals an impending breakout—or a local shakeout.

Meanwhile, the MACD Indicator (12, 26, 9) is flashing a yellow light. The bar chart is flatlining near zero, which is typical of a pausing market. More concerning is the bearish divergence taking shape: while the price holds near highs, the MACD peaks are trending lower. As a result, momentum is quietly eroding.

So, where do we go from here? Two scenarios stand out:

Main scenario (pullback first). Before attempting to conquer an all-time high, the market may need to release some pressure. More specifically, a corrective dip toward 162.355 or even 162.215 would allow buyers to reload and gather liquidity. If support holds there, we will see a renewed push toward 162.63, with the next upside targets sitting at 162.80–163.00.

Alternative scenario (direct breakout). On the other hand, a sudden fundamental spark—whether from the Federal Reserve (Fed) or the Bank of Japan (BoJ)—could trigger an impulsive breakout above 162.63 without any prior correction. In this case, an hourly close above the aforementioned level would open the floodgates to new highs.

But what is the smarter play? In our view, it would be wise to wait for a pullback to 162.355 before going long, with a safety net comfortably below 162.20. Patience could pay off handsomely here.

The ultimate recommendation is to buy USDJPY from the 162.355 support. Lock in profits at 162.63. Place Stop Loss at 162.20.

Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow you to enter a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.