USDJPY Drops from 160 — Is This the Start of a Reversal?USD/JPYOANDA:USDJPYMihai_IacobFrom Warning Signs to First Confirmation In several of my previous analyses, I mentioned that I am bullish on JPY, which naturally translates into a bearish outlook on JPY pairs. The reasoning was not based on a single signal, but on a broader observation: after extended trends, markets tend to show early signs of exhaustion before reversing (very visible if you study JPY Index chart) Yesterday, in the case of USDJPY, we saw the first meaningful indication that such a shift might be starting. The Move from 160 USDJPY approached the 160 level, a psychologically and technically important zone. These types of levels often act as decision points, especially after prolonged trends. Instead of breaking higher, the pair reacted with a strong rejection, followed by a sharp drop of around 250 pips. This kind of move is important not just because of its size, but because of where it happens. When a market fails near a key level and reacts aggressively, it often suggests that buyers are no longer in full control. The Break of 158.60 More importantly, the drop did not stop randomly. Price moved below the 158.60 support level, a horizontal zone that had previously acted as a reference point for buyers since 12 March. At the time of writing, USDJPY is experiencing a normal rebound, with price moving back toward that same level. This is a typical behavior: - Impulsive move down - Followed by a retracement - Returning to the broken level From a structural perspective, this is where the market often decides whether the break is valid or not. What Comes Next? If the 158.60 area now holds as resistance, it would reinforce the idea that the market is transitioning from an uptrend into a corrective or even bearish phase. In that scenario, the current rebound would simply represent a pause before down continuation. The next logical downside level sits around 156.50, which becomes a potential target if bearish momentum continues to develop. Conclusion USDJPY has delivered the first meaningful signal of potential reversal, with: - A rejection near 160 - A strong impulsive drop - A break below 158.60 support - At the moment, the market is in a retracement phase, testing the same level from below. - As long as price remains below 160, the broader idea remains unchanged: ➡️ The bias stays bearish, ➡️ With potential continuation toward 156.50. As always, the key is not prediction, but observing whether structure confirms the idea. 🚀