Japanese Yen Short-term Outlook: USD/JPY Rejected at Trend Resistance

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

• USD/JPY surges more than 6% off yearly lows- rally stalls this week at yearly downtrend
• USD/JPY weekly opening-range intact, breakout pending- U.S. retail sales, consumer sentiment on tap
• Resistance 148.67/74, 149.50/60 (key), 151.63/95- Support 145.92, 145.30/37 (key), 143.05/24

The U.S. Dollar is attempting to mark a fourth weekly advance against the Japanese Yen with USD/JPY rally faltering into resistance at the yearly downtrend. The focus now shifts to the weekly range for guidance as the fate of the monthly recovery hangs in the balance. 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 my last Japanese Yen Short-term Outlook, we noted that a rebound off support left the bears vulnerable with. “broader bearish invalidation eyed at the 1.618% extension / 2022 weekly high close at 148.67/73.” USD/JPY extended more than 6.2% off the yearly low with price registering an intraday high at 148.65 on Monday before reversing lower. The focus now shifts back to this turn from downtrend resistance with initial support now in view.

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 the confines of embedded ascending pitchfork extending off the lows. The lower parallel now converge on near-term support at the May opening-range high (ORH) at 145.92 and the 38.2% retracement of the April advance / objective weekly open at 145.30/37- a break / close below this slope would suggest a more significant high was registered this week / threaten resumption of them broader downtrend. Subsequent support objectives seen at the May open / 61.8% retracement at 143.05/24 with the yearly low-day close (LDC) at 141.56.

Initial resistance is eyed along-the median-line and is backed by key levels at 148.67/74 and the March high-day close (HDC) / 200 day moving average near 149.50/60- a breach / close above this region is ultimately needed to validate a breakout of the yearly downtrend / suggest a larger trend reversal is underway. The first major technical consideration in the event of a breakout is eyed at the 61.8% retracement of the yearly range / 2022 & 2023 highs at 151.63/94- look for a larger reaction there IF reached.

Bottom line: USD/JPY has responded to confluent downtrend resistance with the pullback now approaching initial support and the first test for the bulls. From a trading standpoint, losses would need to be limited to the lower parallel IF price is heading for a breakout here with a close above the 200-day moving average needed to fuel the next leg of the advance.

Keep in mind we get an update on the consumer over the next few days with U.S. retail sales and consumer sentiment on tap- watch the weekly closes here for guidance. Stay nimble into the releases and watch the weekly close here for guidance. Review my latest Japanese Yen Weekly Forecast for a closer look at the longer-term USD/JPY technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist