Market Overview for Dai/Yen (DAIJPY): 2025-10-10

• DAIJPY opened at 153.4 and closed at 152.24, declining amid bearish momentum and heavy volume.
• Price broke below key support at 153.20, forming bearish patterns and confirming oversold RSI conditions.
• Volatility surged during the session, with a notable drop after 15:00 ET, signaling potential exhaustion.
• Bollinger Bands widened, reflecting heightened uncertainty, with price trading near the lower band.
• Turnover spiked during the decline, indicating strong distribution pressure from large participants.

Dai/Yen (DAIJPY) opened at 153.4 at 12:00 ET-1 and closed at 152.24 at 12:00 ET, with a 24-hour high of 153.46 and a low of 152.71. Total volume reached 345,167.19, and notional turnover amounted to 51,481,279.21 JPY. The pair experienced a sharp bearish reversal in the early hours of 10 October.

The structure of the candlestick data reveals a key support level forming around 153.20–153.15, which was decisively broken during the session. A long bearish candle at 15:00 ET-1 (15:00 to 15:15 ET) recorded a high of 152.96 and closed at 152.84, confirming a breakdown. This candle appears to be part of a larger bearish engulfing pattern following a bullish rally. The session also saw a doji forming near 152.89 at 15:15 ET, indicating indecision and potential reversal at the lower end of the range.

Moving averages on the 15-minute chart show a bearish crossover between the 20- and 50-period lines, reinforcing the downward trend. The daily chart remains untested for longer-term averages, but the 50-period line likely resides near 153.30–153.40. The RSI dipped into oversold territory below 30, suggesting the decline may not continue unchecked. Meanwhile, MACD lines crossed below zero, indicating a bearish momentum phase.

Bollinger Bands expanded significantly during the breakdown, with price settling near the lower band at 152.71–152.83. This suggests a high volatility environment, with traders likely entering short positions on the assumption of further downside. Fibonacci retracements from the earlier bullish swing (152.71 to 153.46) identify 61.8% at 152.86 as a key level to watch. The price currently sits slightly below that level, and a retest could confirm either a bearish continuation or a short-term bounce.

Volume and turnover data show a clear divergence. While volume spiked during the 152.96–152.84 bearish candle, the following 15-minute candles showed reduced volume, suggesting weakening bearish conviction. Notional turnover also declined after the initial breakdown, potentially signaling exhaustion among sellers. This may indicate a potential short-term bounce or consolidation before further directional movement.

Backtest Hypothesis
The backtesting strategy in question is a mean reversion approach that identifies overbought and oversold levels using RSI and Fibonacci levels. When the RSI dips below 30 and price nears a 61.8% Fibonacci support, it triggers a long setup, expecting a reversion to the mean. This aligns with DAIJPY’s current positioning near the 61.8% retracement level and RSI in oversold territory. A successful bounce could confirm the pattern, with a target near 153.0–153.1. However, a break below 152.80 could invalidate the setup and reinforce the bearish bias.