USDJPY Short Setup – Supply Zone Reaction After Structure Break

After a clear break of structure (BOS) to the downside around the 145.92 level, USDJPY entered a retracement phase and is now retesting the supply zone created by the last bearish move. This area overlaps with the previous support turned resistance, as well as the dynamic resistance of the moving average, which strengthens the confluence.

We also had a Change of Character (CHOCH) earlier in the structure, marking a shift in momentum from bullish to bearish. The current price action has formed a lower high beneath the supply zone, suggesting that sellers are likely to defend this area.

I'm now watching for rejection signs from this 146.25–146.35 zone, which could confirm the bearish continuation. If price fails to break above this supply and shows weakness (e.g., bearish engulfing or long-wick rejections), I’ll look for entry opportunities to short.

Target:

The first short-term target is a move back to the BOS level at 145.92

A break below that could open the path to 144.09, the next significant support and previous demand zone

Summary:
This setup is based on classic smart money concepts: BOS, supply zone reaction, and a structural lower high. I’ll remain bearish unless the supply is broken cleanly with strong bullish momentum.