Japanese Yen Short-term Outlook: USD/JPY Testing Pivotal Resistance at Ten-Month High

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

USD/JPY breaks November opening-range highs- rally extends nearly 2.3% off monthly low
Bulls now testing key pivot zone at ten-month high – Non-Farm Payrolls on tap tomorrow
Resistance 156.27/43 (key), 157.19, 157.70- Support 155, 154, 153.08/27 (key)

USD/JPY surged to ten-month highs as traders brace for volatility ahead of the September jobs report. While the broader uptrend remains intact, the advance is now testing a pivotal resistance zone, raising the risk for a possible price inflection in the days ahead. Attention turns to tomorrow’s employment data, and with recent Fed commentary highlighting a growing divide among policymakers, the report could prove decisive in shaping rate expectations into the December meeting. Battle lines are 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 my last Japanese Yen Short-term Outlook, we noted that the November opening-range was taking shape just below resistance and that, “From a trading standpoint, losses should be limited to 151.63 IF price is heading higher on this stretch with a close above 154.82 needed to fuel the next major leg of the advance.” USD/JPY broke higher on Monday with the advance now extending nearly 2.3% off the monthly low. The bulls are testing a key resistance zone today at 156.27/43- a region defined by the 2024 November high close (HDC), the April 2024 high-day close (HDC), and the 100% extension of the advance off the yearly low. Looking for a reaction into this zone with the immediate advance vulnerable while below.

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 continuing to trade within the confines of an ascending pitchfork extending off the October lows. Support now rests with the lower parallel which converges on the 155-handle over the next few days. A break below this threshold would expose a larger pullback towards the monthly open at 154 with key support / broader bullish invalidation now raised to the 10/19 high-close / the October opening-range high (ORH) at 153.08/28. Losses below this threshold would be needed to suggest a more significant high is in place and that a larger trend reversal is underway.

A topside breach / daily close above this key pivot zone could fuel another bout of accelerated gains with subsequent resistance objectives eyed at the yearly open at 157.19 and the 2025 HDC at 157.70. Note that the median-line converges on this threshold into the close of the week- look for a larger reaction there IF reached.

Bottom line: USD/JPY is testing confluent resistance today at ten-month highs with major event risk on tap. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 155 IF price is heading for a breakout on this stretch with a close above 156.43 needed to fuel the next major leg of the advance.

Keep in mind the September Non-Farm Payroll report is on tap tomorrow, and traders will be closely eyeing the first major jobs report in months. Fed Fund Futures have continued to discount the December rate decision with market participants now pricing the probability of a cut next month to just 48%. With recent Fed commentary suggesting the committee remains deeply divided on the path of interest rates and with inflation still running well-above target, employment data will be critical ahead of next month’s policy meeting. Stay nimble ahead of the release and watch the weekly close for guidance. Review my latest Japanese Yen Weekly Forecast for a closer look at the longer-term USD/JPY technical trade levels.

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.