Key Week Reversal on the Weekly USD/JPY Chart

A key week reversal is a significant signal indicating a potential trend reversal. This pattern is identified by a large weekly price range that completely engulfs the range of the previous week. Additionally, the closing price of the key week is below that of the previous week.

In the context of USD/JPY, the failure near the historical peak of 160.40 from 1990, with a recent high at 160.20, suggests caution and potential for a deeper retracement.
Previous retracements in this trend were supported by the 55-week moving average (ma) around 146.35, as indicated by the green arrows on the chart. Given that this level aligns with the 38.2% to 50% retracement of the upward move seen since 2023, it presents a reasonable corrective target.

In summary, the key week reversal on the USD/JPY weekly chart implies a possible shift in trend direction and least short term, with attention drawn to a potential retracement towards the 55-week moving average, which historically has provided significant support during similar corrections. Such a move would not be enough for us to abandon our longer term bullish bias.