Market Overview for POLJPY on 2025-09-05

• • •

• POLJPY opened at 41.54 and closed at 42.82 with a high of 43.18 and low of 40.76.
• Key support and resistance levels were tested during the 24-hour period, including a bearish reversal at 41.07 and bullish breakouts near 42.55.
• Volatility expanded significantly after 02:30 ET as price surged above 42.00, with volume increasing sharply.
• Momentum indicators suggest overbought conditions developed after midday trading, with RSI peaking above 70 and MACD showing strong positive divergence.
• Price traded inside contracting Bollinger Bands early morning before a breakout, suggesting a potential shift in trend.

POL/Yen (POLJPY) opened at 41.54 on 2025-09-04 at 12:00 ET and closed at 42.82 at 12:00 ET the next day, hitting a high of 43.18 and a low of 40.76. Total volume was 243,687.9 units, and notional turnover amounted to 10,112,024.5 JPY during the 24-hour period.

Structure & Formations

POLJPY displayed multiple key support and resistance levels over the 24-hour period. A bearish engulfing pattern emerged at 41.07 following a sharp selloff in the early evening, signaling potential bearish momentum. This was followed by a series of bullish engulfing patterns and a strong breakout above 42.55, indicating a reversal in sentiment. A doji formed near 42.18, hinting at indecision, while the price surged above key resistance levels in the early morning hours, including a strong bullish breakout above 42.00 with confirmation via high volume.

Moving Averages

On the 15-minute chart, the 20-period and 50-period SMAs both trended upwards after 02:30 ET, aligning with the bullish move above 42.00. The 50-period SMA acted as a dynamic support zone around 41.50 in the evening. On the daily chart, the 50-period SMA was crossed above in the early morning, suggesting a shift in medium-term sentiment toward the upside. The 200-period SMA, currently at ~41.30, appears to have been left behind, reinforcing the strength of the rally.

MACD & RSI

The MACD crossed above the signal line midday and remained positive for the remainder of the 24-hour period, suggesting strong upward momentum. A histogram expansion was observed during the late-night and early morning hours, aligning with the surge above 42.00. The RSI reached overbought territory (above 70) during the afternoon and again in the early morning hours, suggesting short-term exhaustion and a potential pullback or consolidation in the near future. However, the bullish divergence in the MACD hints that buyers remain active.

Bollinger Bands

Bollinger Bands displayed a period of contraction during the early morning hours before a sharp expansion coincided with the price breakout above 42.00. The price closed just inside the upper band at the end of the period, suggesting elevated volatility and a continuation of the bullish momentum. The width of the bands widened significantly during the breakout, indicating increased market participation and a potential continuation of the trend.

Volume & Turnover

Volume surged after 02:30 ET as price broke above 42.00, with the largest single 15-minute candle (amounting to 33,997.9 units of volume) occurring during the 02:30–02:45 ET period. Notional turnover spiked in tandem, particularly during the early morning hours when the price moved above 42.00, confirming the strength of the bullish move. The volume-to-turnover relationship remained aligned with price action, suggesting a high degree of conviction from participants.

Fibonacci Retracements

Applying Fibonacci retracements to the key 15-minute swing from 40.76 to 43.18, the 61.8% level at ~42.50 was tested and held as support during the late-night hours. This level coincided with the 50-period SMA and provided a strong pivot for the continuation of the upward trend. On the daily chart, the 38.2% retracement of the larger swing from the recent low to the high of the day was at ~41.90 and held as support during the evening hours.

Backtest Hypothesis

Given the strong breakout above 42.00 with confirmation by both volume and momentum indicators, a backtest strategy could be structured to enter long at the close of the 02:30–02:45 ET candle (42.55) with a stop loss placed just below the 42.00 level. A take-profit target could be set at 43.18, the high of the day. This strategy would test whether the breakout and volume confirmation reliably predict a continuation of the upward trend. The presence of overbought RSI and a diverging MACD suggests caution, but the alignment of Fibonacci retracements and moving averages could serve as additional confirmation signals to refine entry timing and risk management.