Saad Ullah
After pushing above the prior weekly high near 160, USD/JPY quickly reversed without follow-through. Analysis from The Gunslinger points out that the inability to hold above this level marked a key turning point - price traded into the 160.4 area, cleared liquidity, but never produced a strong continuation or a higher close. When liquidity gets taken without real buying commitment behind it, quick reversals like this are fairly typical behavior.
USD/JPY Liquidity Sweep Fails to Hold Above 160
The move above the previous weekly high was short-lived. Instead of acceptance above resistance, the market rotated lower almost immediately.
The rejection from 160 wasn't just a technical failure - it was a signal that buyers weren't willing to commit above that level.
More critical than the rejection itself was the loss of the demand zone that initiated the final push higher. Once price broke below that area, the structure began to weaken noticeably. This sequence reflects a clear transition:
- The last impulsive leg up lost its base
- Price failed to stabilize after the breakout
- The market rotated lower without forming a new support
The pullback occurred without a deeper retest, which reinforces the idea that bullish momentum had already started fading before the sweep even completed.
160 Area Now Acts as a USD/JPY Selling Zone
The 160-160.1 region is now being watched as a potential re-entry zone for short positions. What previously acted as a liquidity target has effectively flipped into a supply area.
Price behavior around this level tells a consistent story:
- Rejection after liquidity sweep
- Failure to build acceptance above resistance
- Immediate downside reaction
A revisit to the 160 zone is likely to attract renewed selling interest - this is where swing short positions make the most sense to build.
A revisit to this zone could attract renewed selling interest, consistent with the idea of building a swing short from that range rather than chasing the move lower.
Downside Rotation Toward USD/JPY Weekly Lows
Following the rejection, price has already started rotating lower, with the next meaningful area aligning closer to previous weekly lows. The structure now suggests:
- Initial reaction lower after the failed breakout
- Potential continuation toward deeper liquidity
- Preference for taking profits closer to lower range levels
Partial profits make sense after the initial move, while leaving room for further downside toward previous weekly lows if momentum holds.
The structure shift is real. Rallies back into the 160 area are now selling opportunities, not reasons to get long.
Final Take
USD/JPY is showing early signs of a structural shift after failing to hold above 160. The combination of a liquidity sweep, loss of demand, and rejection from highs suggests that rallies into resistance may now be viewed as selling opportunities rather than continuation setups.
Saad Ullah
