Japanese Yen Short-term Outlook: USD/JPY Stalls into US Election, Fed

Japanese Yen Technical Forecast: USD/JPY Daily / 240min Trade Levels

USD/JPY threatens to snap five-week winning streak- US Presidential Election / Fed Rate Decision on tap
USD/JPY rally stalls into technical resistance- monthly opening-range taking shape below
Resistance 153.02/40 (key), 154.89, 157.16- Support 151.51/94, 148.73-149.60 (key), 146.42/65

The US Dollar surged more than 10.2% against the Japanese Yen since the September/ yearly lows in USD/JPY, with the rally exhausting into technical resistance last month. The focus into the November open is on possible inflection off this zone with the US Presidential Election and the FOMC interest rate decision likely to fuel increased volatility into the close of the week. Battle lines drawn on the USD/JPY daily & 240min technical charts.

Japanese Yen Price Chart – USD/JPY Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView

Technical Outlook: In my last Japanese Yen Technical Forecast we noted that USD/JPY was testing key technical resistance and that, “losses should be limited to the 200 DMA IF Price is heading for a breakout with a close above 153.40 needed to mark uptrend resumption.” USD/JPY has held resistance for over a week now with the November range highs now defined by the 153.02/40 technical zone- a region defined by the May low-day close (LDC) and the 61.8% retracement of the yearly range. The focus is on a reaction off this mark with the monthly opening-range taking shape just below- US elections / Federal Reserve on tap.

Japanese Yen Price Chart – USD/JPY 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView

A closer look at the 240min chart shows USD/JPY trading within the confines of a proposed descending pitchfork extending off the October high. Initial support rests with the highlighted median-line confluence around the 200-day moving average near ~151.60s- a break / close below this threshold would threaten a larger correction within the broader September uptrend with subsequent support eyed at the 2022 weekly high-close at 149.60 and the 2023 high-week close (HWC) at 148.73- both areas of interest for possible downside exhaustion / price inflection If reached. Broader bullish invalidation now raised to the February low-day close (LDC) / August LWC at 146.42/65.

A topside breach / close above 153.40 is needed to mark uptrend resumption with subsequent resistance objectives eyed at the June LDC at 154.89, the 78.6% retracement at 157.16 and the April high-close at 158.44- look for a larger reaction there IF reached.

Bottom line: The September rally in USD/JPY has extended into confluent resistance and while the medium-term outlook remains constructive, the immediate advance may be vulnerable into the November open. Ultimately, we’re on the lookout for an exhaustion low in the weeks ahead. From trading standpoint, losses should be limited to 148.73 for the September uptrend to remain viable with a breach / close above 153.40 needed to fuel the next leg in price.

Keep in mind the US elections and the Fed interest rate decisions are on tap into the November opening-range. Stay nimble into the releases and watch the weekly closes here for guidance.

USD/JPY Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.