- June 1, 2026
- Posted by: EWGFX
- Category: Technical analysis
After reviewing the technical structure, COT positioning, seasonality, and retail sentiment, I still maintain a bullish bias despite price approaching a significant resistance area.
From a technical perspective, the market remains in a clear higher-high and higher-low structure on both the weekly and daily timeframes. Following the sharp recovery from May’s correction, buyers have regained control and are now pushing toward a major liquidity zone between 160.50 and 161.80.
Current retail sentiment shows that 78% of traders are short USDJPY, while only 22% are long. Historically, when retail traders become heavily positioned against a strong trend, the market often continues moving in the opposite direction as liquidity is harvested through a short squeeze.
The latest Commitment of Traders report reinforces this view. Large speculators remain heavily net short the Japanese Yen, indicating that institutional participants continue to favor yen weakness. At the same time, U.S. Dollar positioning has stabilized after months of bearish pressure, removing one of the primary obstacles that previously limited USDJPY upside.
Seasonality presents a mixed picture. Longer-term June data remains slightly negative, but the most recent 2-year and 5-year seasonal studies show positive performance during this period. This suggests that current market dynamics may be outweighing historical seasonal weakness.
My preferred scenario would be a retracement into the H1 Fair Value Gap around 158.50–158.70, where I would look for bullish confirmation before targeting the liquidity resting above 160.50 and potentially the 161.80 area.
Key Levels:
- Bullish Pullback Zone: 158.50 – 158.70
- Resistance: 160.50
- Major Liquidity Target: 161.80
- Invalidation: Daily Close Below 157.40