Japanese Yen Technical Forecast: USD/JPY Short-term Trade Levels
- USD/JPY breakout attempting a sixth consecutive day, rallying over 4.5% off monthly low
- USD/JPY bulls now testing near-term uptrend resistance— reaction key here for trend validation
- Resistance 153 (key), 153.83, 154.82- Support 151.62/94, 150.88/91 (key), 149.18
The Japanese Yen continues to weaken with USD/JPY surging more than 4.5% off the monthly low, extending its advance for a sixth straight session. The breakout has propelled price into a key uptrend resistance zone, where the reaction will be critical in determining whether the move extends or stalls. While the broader outlook remains constructive, momentum is stretched, leaving the pair vulnerable to near-term exhaustion if bulls fail to clear this barrier. The next few sessions could set the tone for the broader trend. Battle lines drawn on the USD/JPY short-term technical charts.
Japanese Yen Price Chart – USD/JPY Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView
Technical Outlook: In last month’s Japanese Yen Short-term Outlook, we noted that USD/JPY was trading within a multi-week range and that, “From a trading standpoint, losses should be limited to 146.54 IF price is heading higher on this stretch with a close above 148.84 needed to fuel the next major leg of the advance.” USD/JPY made another test of support into the October open before reversing sharply higher with the breakout extending more than 4.5% of monthly low. The advance takes price into a longer-term trendline (2021) and while the breakout does keep the medium-term outlook weighted to the topside, the immediate focus is on possible infection off this slope in the days ahead.
Japanese Yen Price Chart – USD/JPY 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView
A closer look at Japanese Yen price action shows USD/JPY trading within a proposed ascending pitchfork extending off the September lows with the upper parallel capping this near-term advance today. Initial support rests with the 61.8% retracement of yearly range / 2022 & 2023 swing highs at 151.62/94 and is backed by the August high / 100% extension of the April rally at 150.88/91- note that the median-line converges on this threshold over the next few days. Broader bullish invalidation is now raised to the September high-close at 149.81.
A topside breach / daily close above this slope exposes subsequent resistance objectives at the 1.618% extension of the September advance at 153.83 and the 78.6% retracement at 154.81- look for a larger reaction there IF reached. The next major technical considerations are eyed at the November high-close / 1.618% extension at 156.26/29 and the objective yearly open at 157.19.
Bottom line: The USD/JPY breakout is testing near-term uptrend resistance– risk for possible inflection here. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to 150.88 IF price is heading high on this stretch with a close above the upper parallel needed to fuel the next major leg of the advance.
Keep in mind the economic docket remains light this week and traders will be closely monitoring developments regarding the ongoing government shutdown- watch the weekly closes here for guidance. Review my latest Japanese Yen Weekly Forecast for a closer look at the longer-term USD/JPY technical trade levels.
USD/JPY Key Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
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--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
