Market Overview for POLJPY: Bearish Breakdown and Volatility Spikes

• POLJPY declined 2.6% over 24 hours, closing at 32.97 after forming bearish engulfing patterns and testing key support levels.
• Volatility expanded in overnight hours, with a 15-minute low of 32.24, while volume spiked sharply post 10 ET.
• RSI entered oversold territory, suggesting potential short-term bounce, though downward momentum remains strong.
• Bollinger Bands widened as price diverged from the lower band, reinforcing bearish bias and a test of 32.49 support.
• Turnover surged to $276,428.10 amid late-session selling pressure, highlighting strong conviction in the downward move.

At 12:00 ET on 2025-09-25, POLJPY opened at 33.95, traded to a high of 33.95 and a low of 32.24, before closing at 32.97. Total volume for the 24-hour period was 125,678.8 units, with notional turnover reaching $276,428.10. The pair has exhibited pronounced bearish momentum amid a sharp intraday sell-off and expanding volatility.

Structure & Formations

POLJPY formed a bearish engulfing pattern during the early hours of the session, with the candle at 02:30 ET closing at 33.14 after opening at 33.15 and trading as low as 33.01. This pattern was followed by a rapid breakdown to the 32.24 level at 10:00 ET. A 15-minute doji formed at 03:45 ET (33.00), suggesting exhaustion near the 33.0 level. Support has held temporarily at 32.73 and 32.49, while resistance remains at 32.97 and 33.13.

Moving Averages

The 20-period and 50-period moving averages on the 15-minute chart were both bearish, with price trading below both. The 50-period MA currently sits at ~33.10, acting as a dynamic resistance. On the daily chart, the 200-period MA is at 33.85, indicating a longer-term bearish bias.

MACD & RSI

The MACD remained in negative territory throughout the session, with the histogram showing increasing bearish divergence after 06:00 ET. The RSI hit 29 at the 12:30 ET bar, entering oversold territory, but failed to trigger a rebound, reinforcing the bearish trend.

Bollinger Bands

Bollinger Bands widened significantly as price dropped below the lower band at 10:00 ET and continued lower, reaching a 24-hour low of 32.24. This expansion suggests heightened volatility, with price likely to remain pressured below the 33.00 level in the near term.

Volume & Turnover

Volume surged after 10 ET, with the 10:00 ET bar (32.84) showing 16,443.8 units traded, the largest in the session. Turnover also spiked during this period, suggesting strong conviction in the downward move. A divergence between price and turnover emerged during the 11:15–11:30 ET period, where price stabilized but turnover declined, hinting at a potential pause in the sell-off.

Fibonacci Retracements

The most recent 15-minute swing from 33.95 (16:00 ET) to 32.24 (10:00 ET) aligns with a Fibonacci 61.8% retracement level at 32.84, where price found brief support. The 38.2% retracement level is at 33.12, acting as a short-term resistance. On the daily chart, the 61.8% retracement level for the broader move remains at 32.49, where a break would confirm a deeper correction.

Backtest Hypothesis

The backtesting strategy suggests entering long positions when RSI crosses above 30 with a bullish engulfing pattern forming near key Fibonacci retracement levels. A short bias is triggered when RSI drops below 70 alongside bearish reversal patterns or when price breaks below the 50-period MA on the 15-minute chart. This strategy appears to align with POLJPY’s current positioning, where RSI entered oversold territory, and a bearish engulfing pattern preceded the breakdown.