POL/Yen Market Overview

• POLJPY declined 3.7% over 24 hours, closing at 29.12 Yen after a morning rally from a 28.28 intraday low.
• Key support at 28.30–28.40 held four times, while resistance around 29.00–29.15 capped early rebounds.
• Bollinger Band contraction in the early morning suggests reduced volatility ahead of a breakout.
• Volume surged in the overnight hours, with a 5,000+ unit candle at 00:00 ET indicating institutional interest.
• RSI dropped into oversold territory twice, yet price failed to recover above the 29.00 level, signaling weak follow-through.

The POLJPY pair opened at 29.04 Yen at 12:00 ET − 1 and fell to a 24-hour low of 28.28 before rallying to close at 29.12 Yen by 12:00 ET. The session saw a total volume of 143,174.9 units and a notional turnover of 4,063,426 Yen, reflecting uneven participation with sharp intraday swings. The price action revealed a bearish bias amid mixed momentum signals.

Structure & Formations

The price traced a V-shaped recovery from a 28.28 bottom, but failed to reclaim key resistance above 29.00. A doji formed at 05:00 ET, signaling indecision, followed by a bullish harami at 07:30 ET. However, bearish engulfing patterns emerged from 18:00 to 20:00 ET, confirming downward pressure. The 28.30–28.40 range acted as a strong support zone, being tested four times over the session.

Moving Averages

On the 15-minute chart, the 20-period and 50-period SMAs remained above the 28.50 level, indicating a bearish divergence from the closing price. The 50-period SMA crossed below the 20-period line near the 28.60 area, suggesting a weakening trend. On a daily basis, the 200-day SMA is currently around 28.70, placing the pair slightly below its long-term trend.

MACD & RSI

The MACD remained bearish throughout the session, with the histogram turning negative by 02:00 ET and staying below the zero line. RSI dropped to 29.4% by 07:00 ET, entering oversold territory, but failed to trigger a meaningful bounce. A second dip to 28.1% around 15:00 ET confirmed a lack of follow-through, hinting at exhaustion or lack of conviction in buyers.

Bollinger Bands

Volatility contracted significantly overnight, with the bands narrowing between 28.30 and 28.60 by 05:00 ET. Price moved out of the lower band at 07:00 ET, briefly testing the upper band at 29.33 before retracting. The current price of 29.12 is near the upper band, suggesting a potential reversal or consolidation phase.

Volume & Turnover

Volume surged in the overnight hours, with a massive 7,476-unit candle at 22:45 ET and a 5,000+ unit candle at 00:00 ET. These spikes coincided with sharp price declines, indicating bearish conviction. However, volume diminished after 03:00 ET, despite a rally in price, suggesting weak follow-through from buyers.

Fibonacci Retracements

Fibonacci levels from the 28.28 low to the 29.33 high show 28.63 at 38.2%, and 28.89 at 61.8%. The current close at 29.12 sits just above the 61.8% level, indicating a possible retest of 28.89 or a continuation of the bullish rebound.

Backtest Hypothesis

Given the presence of a bearish engulfing pattern during the overnight hours and a failure to hold key resistance above 29.00, a backtest strategy based on a “Bullish Engulfing” signal may need refinement. Testing a modified approach that combines the pattern with a 20-period SMA crossover and RSI divergence could improve accuracy. Using a holding period of 1–3 days from 2022 to present, the strategy could be backtested on the correct symbol—once confirmed—to determine its effectiveness in this asset class.