Market Overview for ADAJPY on 2025-10-07

• ADAJPY fell sharply after 6:00 PM ET, dropping to a 24-hour low of 129.40 before stabilizing.
• Volatility expanded as the pair moved more than 4.3% from the day’s high to low.
• RSI and MACD both signaled bearish momentum, with RSI entering oversold territory below 30.
• Price broke below the 20-period moving average on the 15-min chart, confirming downward pressure.
• A bearish engulfing pattern emerged near the 131.90–132.00 resistance level before the selloff.

Price and Volume Summary

At 12:00 ET–1, ADAJPY opened at 131.07 and traded as high as 132.27 before falling to a 24-hour low of 125.38. The pair closed at 126.10 at 12:00 ET. Over the 24-hour window, trading volume reached 1.09 million contracts, with a notional turnover of 139,828,000 Yen. The price action indicates a sharp bearish move, particularly after 3:45 PM ET, where a gap down and long bearish candle marked the start of the decline.

Structure & Formations

Key resistance levels are found at 131.06 (initial support-turned-resistance) and 131.82–131.90, where a bearish engulfing pattern formed before the drop. The support levels include 129.00–129.20 and 128.00, where price bounced slightly but failed to regain momentum. A long bearish candle with a high wick formed near 131.82–132.27, signaling rejection of higher prices. A potential double bottom structure is forming around 125.38–126.10, but it requires confirmation with a close above 127.44.

Moving Averages

On the 15-minute chart, the 20-period moving average fell below the 50-period line, confirming a bearish crossover. The 50-period MA currently sits at 129.00, while the 20-period MA is at 128.50. On the daily chart, the 50-period MA is at 130.35, the 100-period at 131.15, and the 200-period at 131.65. The price is now well below all major moving averages, indicating a strong bearish bias.

MACD & RSI

The MACD line turned negative and crossed below the signal line around 3:45 PM ET, confirming bearish momentum. The histogram has remained negative for over five hours, with the MACD now at -1.82 and the signal line at -0.94. The RSI has fallen to 28, entering oversold territory, which may suggest a short-term bounce is possible but is more likely to result in a false reversal in a strong bearish trend.

Bollinger Bands

The price moved well below the lower band of the Bollinger Bands, indicating high volatility and bearish pressure. The bands have expanded significantly from a narrow range earlier in the day, confirming the breakout of the 131.82–132.00 level. With the price now at the lower band and moving downward, the pair appears to be in a consolidation phase that could lead to a deeper correction or a temporary rebound.

Volume & Turnover

Volume spiked significantly between 3:45 PM and 5:00 PM ET, with the heaviest volume at 127.63–127.86 Yen. The largest single candle occurred at 5:15 PM ET with 87,702 contracts traded as the pair fell from 129.68 to 127.86. The high volume paired with a large price drop confirms bearish conviction. However, volume has decreased since 6:00 PM ET, suggesting that the selloff may be losing steam. The notional turnover increased by over 120% compared to the previous 24-hour period, indicating heightened interest in the pair.

Fibonacci Retracements

Applying Fibonacci levels to the 131.06–132.27 swing, key retracement levels are at 131.64 (38.2%) and 131.26 (61.8%). The 61.8% level was tested multiple times but failed to hold. On a daily chart, the 125.38–131.06 swing shows retracement levels at 127.72 (38.2%) and 128.91 (61.8%), where the current price is below both, suggesting potential support to watch. If the pair breaks below 125.38, the next Fibonacci level to watch is 124.48 (78.6%).

Backtest Hypothesis

A backtesting strategy could involve entering a short position on ADAJPY when a bearish engulfing pattern forms near a key resistance level, confirmed by a break below the 20-period MA and a MACD crossover. A stop-loss could be placed above the pattern’s high, while the initial target could be the next Fibonacci retracement level below. This approach would aim to capture directional moves following strong bearish signals and should be backtested on historical 15-minute candle data to validate its effectiveness across different volatility environments.