USDJPY melting down ahead of central bank week, support holding or breaking?

[Thomas Reed]

Looking at USDJPY right now and ngl this move to 3-week highs on the Yen is getting spicy. The dollar is wobbling all over the place ahead of these upcoming central bank meetings, and price action is barreling straight into some critical demand zones. Momentum on the 4H chart looks heavy, and it feels like seller aggression is stepping up big time.

I'm trying to figure out if this is just classic pre-event position squaring or if institutional order flow is already front-running a broader macro shift between the Fed and BoJ. We're sweeping liquidity right underneath recent swing lows, and if this level snaps, we could see a nasty cascade down to the next major support block. I usually love scalping these dips for a quick mean reversion, but holding anything swing-wise into these rate decisions feels like playing with fire.

Are you guys looking to short the retest if this pivot breaks, or are you sitting on your hands until the central banks actually speak?

 

[Zakami Ng]

Honestly wouldn't try catching the falling knife here. The 4H MACD just gave a nasty bearish crossover below the zero line and I'm not seeing any bullish RSI divergence yet to signal a bottom. Until we get a clear divergence on the 1H/4H chart, support is looking real fragile ahead of the BoJ and Fed. Sitting on my hands for now.

 

[Noah Vance BR]

Until we get a clear divergence on the 1H/4H chart, support is looking real fragile ahead of the BoJ and Fed.

I'm with you on the knife-catching, @Zakami Ng. My backtests on pre-BoJ volatility show that momentum usually carries through right until the actual press conference. Trying to time a bottom here is basically a coin flip with negative expectancy. I’m looking for a flush into a major historical liquidity pocket before even considering a long with a decent R:R. Until the Fed gives us some clarity, the path of least resistance is definitely down.