Japanese Yen Technical Forecast: USD/JPY Bulls Eye Resistance
Japanese Yen Technical Forecast: USD/JPY Weekly / Daily Trade Levels
- USD/JPY September reversal extends nearly 6.9% off yearly low- rally testing major pivot zone
- USD/JPY bulls may be vulnerable near-term, outlook constructive above October open
- Resistance 148.73-149.60 (key), ~151, 151.94- Support 146.42/65, 143.63/90 (key), 140.25-141.02
The Japanese Yen is off more than 0.3% this week with USD/JPY rallying nearly 3.9% since the start of October. Last month’s reversal off technical support has now extended into a major pivot zone and the focus is on possible price inflection here in the days ahead. Battle lines drawn on the USD/JPY weekly & daily technical charts.
Japanese Yen Price Chart – USD/JPY Weekly
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 had rebounded off major support and that, “losses should be limited to the 142-handle IF price is heading higher on this stretch with a close above 144.63 needed to fuel to fuel the next leg.” Price briefly registered an intraweek low at 141.65 last week but failed to mark a close below 142 with the subsequent rally marking the largest single-week advance in nearly 15 years.
The advance has now extended more than 6.8% off the September low with the rally testing a major resistance pivot this week at 148.73-149.60- a region defined by the 2022 high-close and the 2023 high-week close (HWC). Note that the 52-week moving average rests just higher- the focus is on possible inflection / price exhaustion into this region this week.
Japanese Yen Price Chart – USD/JPY Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView
A closer look at the daily chart shows USD/JPY continuing to trade within the confines of the descending pitchfork we’ve been tracking off the July high. A rebound off the lower parallel has now broken through the median-line with the 75% parallel further highlighting near-term resistance at 148.73-149.60.
A topside breach / close above this threshold is needed to keep the immediate advance viable towards the 200-day moving average (currently ~151) and the 2022 high at 151.94. Key resistance is eyed at 152.85-153.40- a region defined by the 1.618% extension of the September advance and the 61.8% retracement of the yearly range. A breach / close above this confluence zone would be needed to invalidate the July downtrend / suggest a larger trend reversal is underway.
Initial support rests with the February low-day close (LDC) / August low-week close (LWC) at 146.42/65 with near-term bullish invalidation now raised to the objective monthly open / 2024 LWC at 143.63/90. Critical support remains unchanged at 140.25-141.02- a close below this threshold would ultimately be needed to mark downtrend resumption.
Bottom line: A reversal off key support at the yearly lows in USD/JPY is now testing a major pivot zone into downtrend resistance. From at trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to the October open IF price is heading higher on this stretch with a close above the 75% parallel needed to fuel the next major leg. Keep in mind we get the release of the September Consumer Price Index (CPI) tomorrow - stay nimble into the release and watch the weekly closes here for guidance.
USD/JPY Key Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Weekly Technical Charts
- Crude Oil (WTI)
- Canadian Dollar (USD/CAD)
- Euro (EUR/USD)
- US Dollar Index (DXY)
- Australian Dollar (AUD/USD)
- British Pound (GBP/USD)
- Gold (XAU/USD)
--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024