USD/JPY is under pressure
USD/JPY recently reached a major macro supply zone between 158.50 and 160.00, where the pair experienced a strong rejection. Moves like this are rarely random — they often signal institutional profit-taking and the potential beginning of a distribution phase after months of sustained bullish trend.
The broader structure remains bullish, but what appears to be changing is the sustainability of the move. Each push higher is becoming increasingly “expensive” in terms of momentum, raising the probability of a rotational phase before any meaningful continuation.
In the short term, the key magnetic level sits around 155, where price could fill the daily inefficiency. Below that, the first true institutional demand is located between 151.80 and 152.50, while a deeper correction could extend toward the 148–150 region — a critical area for preserving the medium-term bullish structure.
From a positioning perspective, the COT report is starting to show an important shift worth monitoring: the U.S. dollar remains net long, but with less aggressive exposure, while the Japanese yen is beginning to attract buying interest from commercial hedgers — behavior typically associated with accumulation phases. This is not yet a reversal signal, but it suggests the market may be entering a transitional environment.
Retail sentiment remains relatively balanced and does not yet provide a clear contrarian edge. However, historically, when USD/JPY begins to decline, many traders attempt to buy the dip, a dynamic that can unintentionally accelerate the downside move.
February seasonality tends to be moderately bullish for USD/JPY, but when institutional flows begin to diverge, positioning usually carries more weight than historical patterns.
The primary driver remains unchanged: int