Japanese Yen Short-term Outlook: USD/JPY Tests Trend Support—Breakdown Risk Builds

This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.

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

USD/JPY pulls back after failing at key resistance at fresh yearly highs into the close of March
Broader uptrend remains intact, but momentum divergence warns of vulnerability
Price is now testing trend support within a rising wedge formation- a reaction off this level could dictate the next move
Key event risk on tap into a shortened holiday week with President Trump speaking tonight and NFPs on Friday
Resistance 158.88, 159.70, 160.22/74 (key) - Support 157.33/70 (key), 156.67, 156.05

USD/JPY is turning lower after failing to sustain gains near a major resistance zone into the close of March, with the pair now marking a third consecutive daily decline. The pullback follows a strong advance off mid-month lows but comes amid growing signs of momentum divergence at recent highs. Price is now testing trend support within a rising wedge formation, a technically significant zone that could determine whether this decline remains corrective—or evolves into a larger reversal in the sessions ahead. 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 responding to near-term resistance and that, “From a trading standpoint, losses would need to be limited to 156.37 IF price is heading higher on this stretch with a close above 158.88 needed to fuel the next major leg of the advance.” USD/JPY registered an intraday low at 157.27 that day before reversing sharply higher with the advance extending more than 2% off those lows.

The rally was halted into the close of March at a key resistance barrier around the April 2024 high and the 2024 high-week close at 160.22/74. Ongoing momentum divergence into the highs suggests the multi-month advance may be vulnerable here. USD/JPY is now poised to mark a third consecutive daily decline with the price testing the lower bounds of a rising wedge formation extending off the March swing lows. We are looking for a reaction off this slope with a break / daily close below needed to invalidate this formation and suggest a larger correction is underway.

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 a proposed descending pitchfork formation with price breaking below the 75% parallel yesterday. A break below the March slope would threaten a decline towards pivotal support at the 38.2% retracement of the late-February advance and the 2025 high-day close (HDC) at 157.33/70. Note that the median-line converges on this threshold into the close of the week and losses below this threshold would be needed to suggest a more significant high is in pace and a larger trend reversal is underway. Subsequent support objectives rest with the yearly open at 156.67 and the March open at 156.05.

Initial resistance is eyed at the 2025 swing high at 158.88 and is backed by near-term bearish invalidation the yearly high-day close (HDC) at 159.70. Ultimately, the bulls would need to clear the 2024 HWC at 160.74 to mark uptrend resumption and fuel the next major leg of the rally towards the 2024 high-day & high-week closes (HDC / HWC) at 161.69/95.

Bottom line: The USD/JPY is testing support at the March uptrend- looking for a reaction off this slope. From a trading standpoint, rallies would need to be limited to 159.70 IF price is indeed heading lower on this stretch with a close below the March trendline needed to fuel the next leg lower in price.

Keep in mind it is a shortened holiday week with US Non-Farm Payrolls on tap Friday. Later tonight, President Trump will be addressing the nation regarding the ongoing war in Iran. The speech has the potential to impact broader market sentiment here and could fuel added volatility in the Asia session. Stay nimble here into the monthly open 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, Senior 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.