Japanese Yen Forecast: USD/JPY Rally Nears Intervention Zone
USD/JPY is approaching a major resistance zone where intervention risks begin to rise. The next move could be pivotal.
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Japanese Yen Technical Forecast: USD/JPY Weekly Trade Levels
- USD/JPY is poised to mark a fourth consecutive weekly advance after rebounding from key uptrend support.
- Price is now approaching a major resistance zone near the yearly highs- Intervention threat rises.
- A breakout above resistance would signal continuation of the broader uptrend.
- Key Event Risk: U.S. Non-Farm Payrolls on Friday, CPI data next week
- Resistance 160.29/74 (key), 161.95, 163.33- Support 157.70, 156.67 (key), 154.79-155.39
USD/JPY has extended its recovery from the May lows and is now approaching a major resistance zone near the yearly highs. While the broader technical outlook remains constructive, traders are once again nearing levels that have historically attracted the attention of Japanese officials. This leaves the pair at a critical juncture, where the clash between bullish momentum and intervention risk could determine the next major move in USD/JPY. Battle lines are drawn on the USD/JPY weekly technical chart heading into NFPs tomorrow.
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 Weekly
Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView
Technical Outlook: In last month’s Japanese Yen Technical Forecast we noted that USD/JPY was testing confluent uptrend support, “with the May opening-range taking shape just above. From a trading standpoint, rallies would need to be limited to 158.55 IF price is heading lower on this stretch with a close below 154.79 needed to fuel the next major leg of the decline.” The May opening range high broke the following week with the rally extending more than 3% off the monthly low. The bulls are poised to mark a fourth consecutive weekly advance with USD/JPY now approaching critical resistance at the yearly highs. Note that the intervention risk rises at these levels and the focus is on a reaction into this pivotal zone.
Resistance is eyed at 160.29/74- a region defined by the 2026 close high, the yearly swing high, and the 2024 high-week close (HWC). A topside breach / weekly close above this threshold is needed to mark uptrend resumption towards subsequent resistance objectives at the 2024 swing high at 161.95 and the 1.618% extension f the 2025 advance at 163.33.
Weekly support rests with the 2025 high-week close (HWC) at 157.70 with broader bullish invalidation now raised to the objective yearly open at 156.67. Ultimately, a break below the yearly low-week close (LWC) / 61.8% retracement of the yearly range at 154.79-155.39 would be needed to suggest a more significant high is in place and a larger trend reversal is underway.
Bottom line: USD/JPY is approaching pivotal resistance at the yearly high- risk for inflection here with the intervention threat ever looming. Leaving the intervention risk aside, from a trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards the yearly high- losses would need to be limited to 157.70 IF price is heading higher on this stretch with a close above 160.74 needed to fuel the next major leg of the advance.
Keep in mind we get the release of U.S. Non-Farm Payrolls on Friday with key inflation data on tap next week. Stay nimble into the June opening range and ensure risk is well defined on any open exposure into the weekend- watch the weekly close for guidance here. Review my latest Japanese Yen Short-term Outlook for a closer look at the near-term USD/JPY technical trade levels.
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--- Written by Michael Boutros, Senior Technical Strategist
Follow Michael on X @MBForex
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