Japanese Yen Short-term Outlook: USD/JPY Faces Largest Weekly Loss Since 2024– Key Support in Focus

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

• USD/JPY is on pace for its largest weekly decline since late 2024 after reversing sharply from technical resistance.
• Price is now approaching a critical support band defined by prior multi-year swing highs and key retracement levels- inflection risk rises.
• Key event risk into the close of the week with US CPI on tap Friday
• Resistance 154.79, 156.64/67 (key), 157.70 - Support 151.95-152.09 (key), 150.92, 150.30/37

USD/JPY has rolled over after marking an outside-day reversal on Monday with the bears approaching a technically significant floor after a third day of sustained selling pressure. The decline has carried price back toward a confluence support zone that previously served as a launch point last month. This area now represents a decisive inflection region for the pair. A breakdown beneath it would signal renewed downside momentum and open the door to further losses, while a firm hold could allow the market to attempt a stabilization into next week. How price behaves into the weekly close will likely shape the near-term trajectory for the Yen. 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, “testing resistance here and while the broader outlook remains constructive, the immediate advance may be vulnerable to near-term exhaustion. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops – losses should be limited to 157.19 IF price is heading higher on this stretch..” USD/JPY turned lower the following day with the pair plunging more than 4.6% off the January high before rebounding into the close of the month. The recovery carried over into the February open with price extending more than 3.6% before exhausting on Monday, posting an outside-day reversal off resistance at the 2025 high-day close at 157.70.

USD/JPY is now poised to mark a third consecutive daily decline with the bears on pace to post the largest single-week decline since November of 2024. Key support is now in view, and the focus is on a reaction into this pivotal zone heading into the close of the week.

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 descending pitchfork extending off the late-January high with the median-line highlighting critical support at 151.95-152.09- a region defined by the 2022 & 2023 highs, the 38.2% retracement of the 2025 advance, and the January low. A break / daily close below this threshold would be needed to suggest a larger breakdown is underway and threaten another bout of accelerated losses. Subsequent support objectives are eyed at the July high at 150.92, backed by the 200-day moving average and the 100% extension of the January decline at ~150.30/37. Look for a larger reaction there IF reached.

Monthly open resistance is eyed at 154.79 with medium-term bearish invalidation now lowered to the objective yearly open and the 61.8% retracement of the January range at 156.64/67. Note that the upper parallel converges on this level next week and a topside breach / daily close above this level would be needed to suggest a more significant low is in place / a larger trend reversal is underway. Subsequent resistance is eyed at 2025 high-day close (HDC) at 157.70.

 

Bottom line: The USD/JPY is approaching pivotal support near the January lows, and the focus is on possible inflection into this zone in the days ahead. From a trading standpoint, rallies should be limited to 154.79 IF price is heading for a break on this stretch with a close below 151.95 needed to fuel the next major leg of the decline.

Keep in mind we get the release of key inflation data on Friday with the January Consumer Price Index (CPI) on tap. The release is likely to fuel added volatility on the heels of today’s strong NFP release as traders attempt to gauge the Fed’s willingness to cut rates. Fed Fund Futures are now pricing only a 60% probability the first-rate cut will be delivered in June (down from 76% last week). Stay nimble into the release and watch the weekly close here for guidance. Review my latest Japanese Yen Weekly Forecast for a closer look at the longer-term USD/JPY technical trade levels.

Key USD/JPY Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex