Japanese Yen Short-term Outlook: USD/JPY Breakout Rips to Resistance

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.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Yen setup and more. Join live on Monday’s at 8:30am EST.

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.

Active Short-term Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.