Market Overview for POL/Yen (POLJPY) on 2025-09-11

• POLJPY saw a sharp intraday drop of 1.63% amid a volatility expansion and divergent volume spikes.
• Momentum indicators signaled overbought conditions early, followed by a rapid RSI divergence and bearish reversal.
• A key support at 39.40–39.45 held temporarily, but with signs of weakening, suggesting further downside risk.
• Bollinger Band expansion coincided with the breakdown of a bullish trend, indicating a potential bearish continuation.

POLJPY opened at 39.93 on 2025-09-10 at 16:00 ET, surged to a high of 40.63, and closed at 40.03 at 12:00 ET on 2025-09-11. Total 24-hour volume reached 424,375.3 units, with a notional turnover of 17.11 million Yen, marking one of the largest single candles in the dataset with a high-volume bearish reversal near the close.

Structure & Formations

A sharp bearish reversal unfolded after the 02:30 ET peak at 40.63, breaking key psychological levels and forming a bearish engulfing pattern at the top of an ascending channel. A 39.40–39.45 support level showed initial resilience but was revisited late in the session with bearish pressure intensifying. Notable bearish divergence is evident in the last 6 hours, with prices failing to retest key levels despite rising volume.

Moving Averages

On the 15-minute chart, the 20SMA crossed below the 50SMA, forming a bearish “death cross” signal. Daily moving averages (50/100/200) show a broader bearish alignment, with the 50DMA falling below the 100DMA and 200DMA. This confirms a medium-term bearish bias and aligns with the recent bearish momentum.

MACD & RSI

The 15-minute MACD showed a bearish crossover and negative histogram divergence late in the session, aligning with the price drop. RSI spiked into overbought territory at the peak, then plummeted into oversold territory by 15:45 ET, suggesting a potential exhaustion of bullish momentum and increasing bearish dominance.

Bollinger Bands

Bollinger Bands expanded during the peak at 40.63, reflecting rising volatility. Prices moved outside the upper band and then collapsed to the lower band, indicating a reversal from overbought to oversold conditions. The current price sits just above the lower band, near the 39.40 support level, suggesting a critical test for stability.

Volume & Turnover

Volume spiked at key turning points, particularly during the bearish reversal at 03:30 ET and again at 12:45 ET. Notional turnover reached a peak during the 12:45 ET candle, with prices falling sharply amid high volume, indicating strong bearish conviction. Divergence between volume and price in the last 4 hours suggests potential distribution or profit-taking at critical levels.

Fibonacci Retracements

Applying Fibonacci retracements to the 15-minute swing from 39.46 to 40.63, the 61.8% level is at 40.13, closely matching the current price range. This suggests a possible consolidation phase or a potential short-term bounce if the 39.40 support holds.

Backtest Hypothesis

The backtest strategy involves a short signal triggered by a bearish engulfing pattern at overbought RSI levels, followed by a stop-loss placed just above the 40.40 resistance and a target at the 39.40 support. Volume confirmation is required for signal entry. This aligns with the observed 15-minute bearish reversal and overbought RSI divergence, suggesting a viable short-term bearish setup with defined risk and reward parameters.