Market Overview for POLJPY on 2025-09-16

• POLJPY opened at ¥38.21, dropped to a 24-hour low of ¥37.61, and closed near ¥37.67 at 12:00 ET.
• A sharp bearish move followed by a consolidation phase suggests potential support near ¥37.61–¥37.57.
• High volatility and volume spikes indicate significant short-term interest and possible reversal setups.
• RSI entered oversold territory, suggesting a possible bounce, while MACD shows bearish divergence.
• Bollinger Bands expanded during the drop, indicating heightened volatility and a possible mean reversion.

POLJPY opened at ¥38.21 at 12:00 ET–1 and closed at ¥37.67 at 12:00 ET after a significant selloff. The pair hit a low of ¥37.61 during the session, with an intraday high of ¥38.39. Total volume over the 24-hour period was approximately 142,605.9 units, with a notional turnover of ¥5,267,872.7 (calculated as volume × average price). The price action reflects a bearish breakout followed by consolidation, raising questions about the sustainability of the downward move.

Structure & Formations

The 24-hour candlestick pattern shows a distinct bearish continuation after a morning reversal pattern. A strong bearish engulfing pattern formed around ¥38.04 to ¥37.79, followed by a series of small-bodied candles indicating indecision. Key support levels are forming around ¥37.61–¥37.57 and ¥37.32–¥37.27, with ¥38.24–¥38.39 as resistance. A doji appeared near ¥37.75, hinting at potential exhaustion of bearish momentum. The price appears to be consolidating within a descending triangle, with a possible breakout to the downside.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages are both trending downward, with the 50-period MA crossing below the 20-period, reinforcing the bearish bias. On a daily basis, the 50-period and 100-period MAs are both below the 200-period, suggesting a longer-term bearish trend. The current price of ¥37.67 sits below all three moving averages, indicating further downside potential unless a strong reversal occurs.

MACD & RSI

MACD turned negative after a sharp bearish crossover, with the histogram expanding during the selloff. This suggests strong bearish momentum, but divergence appears in the later stages as the histogram starts to shrink while the price remains in a downtrend. RSI has entered the oversold zone (below 30), signaling a potential bounce. However, the strength of the bearish move means a bounce may not necessarily lead to a reversal. The combination of oversold RSI and bearish MACD divergence creates a cautious outlook for the next 24 hours.

Bollinger Bands

Bollinger Bands have expanded significantly during the bearish phase, indicating heightened volatility. The price closed near the lower band, suggesting a possible reversion to the mean or a continuation if the lower support level breaks. The narrow band width in the early morning hours preceded the sharp decline, a classic volatility contraction pattern that often precedes a breakout. If the price remains below ¥37.61–¥37.57, further expansion of the bands could occur.

Volume & Turnover

Volume spiked during the initial breakdown, particularly in the 04:30–06:00 ET window, with a large notional turnover during the ¥37.92 to ¥37.61 move. The volume declined after the price hit ¥37.61, indicating waning bearish conviction. Notional turnover also decreased in the final hours, suggesting that the selling pressure may have eased. A divergence between falling price and declining volume could signal the end of the downtrend, although confirmation is needed.

Fibonacci Retracements

Applying Fibonacci retracement to the ¥38.39 high and ¥37.61 low, key levels include ¥37.95 (23.6%), ¥37.87 (38.2%), and ¥37.79 (50%). The price appears to have found initial support at ¥37.79 and then at ¥37.67, suggesting that ¥37.61 could be the next critical level. A retest of the ¥37.87–¥37.95 levels could offer a short-term bounce, but failure to hold above ¥37.61 could lead to a test of the ¥37.32–¥37.27 zone.

Backtest Hypothesis

The backtest strategy involves a mean-reversion approach using a combination of RSI (14) and Bollinger Bands (20, 2). The signal is triggered when the price touches the lower Bollinger Band and RSI enters the oversold zone (<30), with a stop-loss placed just below the recent low. A long position is opened upon this confluence, with a target at the 38.2% Fibonacci retracement level. Given the current price near the lower band and RSI in oversold territory, this setup appears applicable to the recent POLJPY move. However, the bearish momentum and divergence in MACD suggest that while a bounce is possible, a continuation of the downtrend remains a high-probability outcome unless a strong bullish reversal forms.