Japanese Yen Forecast: USD/JPY Bears Assume Control as Uptrend Cracks

Japanese Yen Technical Forecast: USD/JPY Weekly Trade Levels

USD/JPY reversal breaks September uptrend – four-week decline testing yearly moving average
USD/JPY threat for deeper setback into trend support- Fed testimony, U.S. inflation data on tap
Resistance 151.95-152.50, 155.03, 157.70-158.45 (key)- Support 148.74, 146.95 (key), 143.90

The Japanese Yen is poised to snap a four-week rally against the US Dollar with last week’s sell-off in USD/JPY marking the largest single-week decline since November. The immediate focus is on a reaction around the yearly moving average and although the medium-term threat remains lower, the bears may be vulnerable to some kickback here. Battle lines drawn on the USD/JPY weekly technical chart.

Japanese Yen Price Chart – USD/JPY Weekly

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

Technical Outlook: In last month’s Japanese Yen Technical Forecast we noted that USD/JPY had reversed off uptrend resistance with price approaching initial support at, “the November high-close near the 155-handle. Note that basic channel support converges on this level over the next few weeks and a break below this slope is needed to suggest a more significant high was registered last week / a larger reversal is underway.”

The bears sat at support for three-weeks before finally breaking lower with USD/JPY extending a full 5% off the yearly high last week. The immediate focus is on this key pivot zone around 151.95-152.50- a region defined by the 2022 / 2023 highs and the 52-week moving average. A close below this threshold last week leaves the trade vulnerable with subsequent weekly support objectives seen at the 2022 high at 148.74 and the 61.8% Fibonacci retracement of the September rally at 146.95- both levels of interest for possible downside exhaustion / price inflection IF reached.

A close back above the yearly moving average would expose resistance at the November high close at 155.03 with critical resistance steady at the April high-close / 2025 high-week close (HWC) at 157.70-158.45- look for a larger reaction there IF reached. Ultimately, a breach / close above the 2020 parallel is needed to fuel the next major leg of the advance towards the 2024 high / HWC at 160.73-161.95.

Bottom line: USD/JPY reversed off long-term technical resistance last month with the recent decline breaking below the September uptrend. The immediate focus is on this week’s close with respect to 151.95-152.50. From a trading standpoint, rallies should be limited to 155 IF price is heading lower on this stretch with a break of the lows needed to fuel the next leg of the decline.

Keep in mind Federal Reserve Chair Powell will begin his two-day testimony before congress today with key U.S. inflation data on tap this week. Stay nimble onto the releases and watch the weekly close for guidance here. Review my latest Japanese Yen Short-term Outlook for a closer look at the near-term USD/JPY technical trade levels.

USD/JPY Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.