Market Overview for POLJPY on 2025-09-22

• POLJPY opened at 36.82 and closed at 33.46, with a 24-hour high of 36.86 and a low of 32.08.
• A bearish breakdown occurred below key support levels, confirmed by declining momentum in RSI and MACD.
• Volatility expanded significantly as prices fell into the lower half of Bollinger Bands.
• Volume spiked during the early morning ET selloff, with a sharp divergence in notional turnover.
• A deep Fibonacci retracement of 61.8% was reached near 33.45, hinting at potential near-term support.

POLJPY opened at 36.82 on 2025-09-21 at 12:00 ET and closed at 33.46 on 2025-09-22 at 12:00 ET. The 24-hour high was 36.86, and the low was 32.08. Total volume was 128,808.9 units, with a notional turnover of approximately ¥4.46 million (assuming average price of ¥34.69).

The structure of the 24-hour candlestick pattern was bearish, with a long lower shadow and a near-tail-less body during the critical price drop between 00:15 and 02:45 ET. This suggests panic selling during that period. Key support levels were observed at 35.00 (50-period MA), 34.43 (daily low), and 33.45 (61.8% Fibonacci retracement of the prior upward leg). Resistance levels remained at 35.67 and 36.41. A notable pattern includes a bearish engulfing candle at 00:15 ET, confirming a shift in sentiment.

20 and 50-period moving averages on the 15-minute chart indicated bearish momentum, with the 50 MA dropping below the 20 MA in the late hours of the session. On the daily chart, the 50, 100, and 200-period MAs are aligned bearishly, reinforcing a trend of continued weakness. The MACD line moved below the signal line during the sharp selloff, while the histogram indicated declining bullish momentum. The RSI dropped below 30 by midday, suggesting oversold conditions and a potential short-term bounce.

Bollinger Bands showed a sharp expansion during the early morning drop, as prices fell to the lower band at 32.08 before rebounding slightly. Volatility returned to tighter bands by the end of the session, indicating a possible consolidation phase. The 15-minute chart volume showed a sharp spike during the selloff period, confirming the move lower. Notional turnover, however, showed a divergence by mid-morning, suggesting a potential exhaustion of sellers.

Backtest Hypothesis

Given the observed bearish momentum, a backtest strategy could focus on a mean-reversion approach during overbought/oversold conditions. Entering short positions on RSI dips below 30 and setting stop-loss levels at the 38.2% Fibonacci retracement (34.00) may capture short-term volatility. A trailing stop above key resistance levels could protect gains if the trend reverses. This approach leverages the clear breakdown in structure and the confirmed support levels for potential entries.