Japanese Yen Short-term Outlook: USD/JPY Tests Uptrend Support

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

USD/JPY plunges nearly 2.7% into August open- now testing multi-week uptrend support
USD/JPY weekly range set just above support- U.S. Core PPI, Retail Sales on tap
Resistance 148.65, 149.28/50 (key), 150.88- Support 146.28/70 (key), 144.10/22, 142.25

USD/JPY plummeted into the monthly open with the post-NFP sell-off now testing the July uptrend. The focus is on whether the bulls can hold the line with the weekly opening-range now set just above slope support. 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 approaching consolidation resistance and that, “losses would need to be limited to 146.15 IF price is heading for a breakout on this stretch with a close above 149.50 ultimately needed to fuel the next major leg of the April advance.” USD/JPY registered an intraday low at 145.86 one week later before surging more than 3.4% into the close of July.

The rally failed at confluent resistance into the August open with the NFP inspired sell-off plunging more than 2.8% off the highs. Price has been riding pitchfork support for the last few days with today’s decline once again testing the July uptrend. The weekly opening-range is set just above this slope- looking for a breakout 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 testing slope support in early-US trade- a break below this slope exposes key support at the May swing high / 38.2% retracement of the April advance at 146.28/70- note that a break / close below this threshold would constitute a break of the August opening-range and would suggest a more significant correction is underway. The next major technical consideration rests with the 61.8% retracement / 100% extension of the monthly decline at 144.10/22 and the May low / 78.6% retracement at 142.11/25.

Initial resistance is eyed wit the December low / May high at 148.65 and is backed by 149.28/50- a region defined by the 61.8% retracement of the monthly decline, the 200-day moving average, and the March high-day close (HDC). A breach / close above this threshold is needed to fuel another run at the highs. Subsequent topside objectives eyed at the 100% extension of the April advance at 150.88 and the 61.8% retracement of the yearly decline / 2022 & 2023 highs at 151.63/94.

Bottom line: USD/JPY is testing the July advance here with the weekly range set just above uptrend support- look for the breakout and watch today’s close with respect to this slope. From a trading standpoint, rallies should be limited to 149.50 IF price is heading lower on this stretch with a close below 146.28 needed to fuel the next major leg of the decline.

Keep in mind we get another inflation release tomorrow with U.S. Core PPI on tap ahead of retail sales on Friday. Stay nimble into the releases 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.

Active Short-term Technical Charts

British Pound Short-term Outlook: GBP/USD Rally Unravels Ahead of Fed

--- 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.