Market Overview: POLJPY (2025-10-03)

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• POLJPY opened at 34.78 and reached a high of 35.60 before closing at 35.12, down 1.67%.
• Volatility spiked in early trade, with a 15-minute move from 34.94 to 35.60.
• Volume surged during 19:30–20:30 ET, confirming a bearish reversal after a sharp intraday high.
• RSI overbought levels (70+) were hit at midday but closed below 50, signaling waning momentum.
• Bollinger Bands showed a narrow contraction before the sharp drop, suggesting a potential breakout was anticipated.

POLJPY opened at 34.78 on 2025-10-02 at 12:00 ET and closed at 35.12 on 2025-10-03 at 12:00 ET. The pair reached a high of 35.60 and a low of 34.78 during the 24-hour period. Total volume traded was approximately 102,417.1, with total turnover amounting to 3,593,305.1 (based on the 'amount' field).

Structure & Formations

The 15-minute chart shows a bearish reversal pattern around 19:30 ET after a sharp intraday high. A candle with a long upper wick formed at 19:45–20:00 ET, followed by a series of bearish candles. Resistance levels emerged at 35.50–35.60 and 35.30, with a notable support at 35.12–35.15. A bullish engulfing pattern briefly appeared at 05:15–05:30 ET but failed to hold.

Moving Averages

On the 15-minute chart, the 20-period SMA crossed below the 50-period SMA, signaling a potential bearish bias. The daily 50- and 200-period SMAs suggest a flat to slightly bearish setup, with price hovering just above the 200 SMA but below the 50 SMA. This may indicate short-term weakness amid a longer-term consolidation phase.

MACD & RSI

The MACD histogram showed a bearish divergence from midday onward, with a sharp contraction in momentum following the high. RSI peaked above 70 in the early hours and then fell below 50 by the close, suggesting weakening bullish momentum and the potential for a retracement. An RSI reading near 40 at the end of the 24-hour window implies moderate oversold conditions, though not extreme.

Bollinger Bands

Bollinger Bands constricted in the late morning, signaling a period of low volatility before the sharp sell-off. Price moved outside the upper band at 19:15 ET, only to be pulled back below the lower band by 20:15 ET. This wide band expansion indicates a potential breakout, though confirmation may be needed in the next 24 hours.

Volume & Turnover

Volume surged during 19:30–20:30 ET, confirming a bearish reversal from 35.60 to 35.12. However, turnover remained relatively stable during that period, suggesting the price action was driven by large orders or liquidity takers. A divergence appeared between late price declines and modest turnover, which may signal an end to the sell-off or a need for caution.

Fibonacci Retracements

Fibonacci levels on the recent 15-minute swing from 34.78 to 35.60 showed the 38.2% level at 35.42 and the 61.8% at 35.19. Price reversed near the 38.2% level, suggesting a temporary pause in the bearish momentum. On the daily chart, the 50% retracement of the larger move is near 35.10, which could act as a pivot point.

Backtest Hypothesis

Given the bearish reversal patterns and RSI divergence observed, a potential backtesting strategy could involve a short entry at the close of the bearish reversal candle (35.32), with a stop above the 35.60 high and a target at 35.10 (Fib 50%). A trailing stop could be implemented once price breaks below 35.25. This strategy would aim to capitalize on the mean-reversion setup following an overbought condition and would align with the observed volume confirmation.