Japanese Yen Short-term Outlook: USD/JPY Coils Ahead of BoJ, NFP

Japanese Yen Technical Forecast: USD/JPY Short-term Trade Levels

• USD/JPY rebounds off support at 2024 low- rebounds more than 2.8% off yearly low
• USD/JPY weekly opening-range remains intact ahead of BoJ, U.S. Non-Farm Payrolls
• Resistance 143.90 (key), 146.11, 147.14- Support 141.56/96, 140.25/49 (key), 137.36/91

The U.S. Dollar plunged more nearly 12% off the yearly high against the Japanese Yen with USD/JPY rebounding off support at last week near the 2024 low. A weekly opening-range breakout is imminent and we’re looking for guidance heading into the close of the month / week with the bears vulnerable while above key Fibonacci support. Battle lines drawn on the USD/JPY short-term technical charts heading into May / Non-Farm Payrolls.

Japanese Yen Price Chart – USD/JPY Daily

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

Technical Outlook: USD/JPY rebounded off confluent downtrend support last week at 140.25/49- a region define by the December 2023 low and the 61.8% retracement of the entire 2023 rally. Note that the 25% parallel of the descending pitchfork also converges on this threshold further highlights the technical significance of this pivot zone.

A really of nearly 3% off the lows takes price back into resistance this week at the 2024 low-week close (LWC) at 143.90. The weekly opening range has taken shape just below and the immediate focus is on a breakout for guidance here.

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 into the median-line today with initial support seen at the low-day close (LDC) / 50% retracement at 141.56/96. A topside breach / close above the weekly highs would expose the 100% extension of the recent advance at 146.11 and the 38.2% retracement at 147.14- both levels of interest for possible topside exhaustion / price inflection IF reached. Broader bearish invalidation is eyed at the 1.6185% extension / 2022 weekly high close at 148.67/73.

Ultimately, a break / daily close below 140.25 is needed to mark downtrend resumption with the subsequent support seen at the March high-day close (HDC) / March high at 137.35/91 and the 78.6% retracement at 134.65.

Bottom line: A rebound off downtrend support is now testing the median-line of the January decline- immediate focus is on a breakout of the weekly opening-range with the bears vulnerable while above slope support. From a trading standpoint, rallies would need to be limited to 147.14 IF price is heading lower on this stretch with a close below 140.25 needed to fuel the next leg of the decline.

Keep in mind we are heading into the monthly cross with the Bank of Japan (BoJ) interest rate decision and U.S. Non-Farm Payrolls on tap. Stay nimble into the release and 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