Japanese Yen Short-term Outlook: USD/JPY Recovery at Trend Resistance
US Dollar rebounded off technical support last week with USD/JPY now testing the November downtrend. Battle lines drawn on the USD/JPY short-term technical charts.
Share this:
Japanese Yen Technical Forecast: USD/JPY Daily / 240min Trade Levels
- USD/JPY rebounds off key support into December- Monthly opening-range taking shape
- USD/JPY rally now testing confluent downtrend resistance- risk for exhaustion / price inflection ahead
- Resistance 151.74/99 (key), 153.02/40, 154.34- Support 148.73-149.60 (key), 146.14/65, 144.17/63
The US Dollar is up more than 2.1% off the monthly low against the Japanese Yen with USD/JPY rebounding off key testing support into the December open. The recovery has now extended into technical resistance at the November downtrend with major US inflation data on tap tomorrow. 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 Technical Forecast we noted that USD/JPY was testing the median-line support and that, “the immediate focus is on a breakout of the weekly opening-range for guidance with the near-term threat lower while below 155.” Price broke lower the following week with USD/JPY plunging nearly 5.2% off the November high.
The decline rebounded off confluent support last week at the 2022 weekly high-close / 2023 high-week close (HWC) at 148.73-149.60. The immediate focus is on this recovery with the bulls testing confluent resistance today at 151.74/99- a region defined by the 38.2% retracement of the November decline, the 2022/2023 highs and the 200-day moving average. Looking for a possible reaction off this mark over the next few days.
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 November highs with the upper parallel further highlighting resistance here at 151.74/99. A topside breach would expose the May low-day close (LDC) / 61.8% retracement at 153.02/40 backed by the November high-day reversal close at 154.34- a breach / close above this threshold would be needed to suggest a more significant low was registered last week / a larger trend reversal is underway.
A break below this key support zone would threaten resumption of the November downtrend towards the median-line (currently ~148), with subsequent objectives seen at 146.13/65 and the August low-day close (LDC) / January low-week close (LWC) at 144.17/63- both levels of interest for possible exhaustion / price inflection IF reached.
Bottom line: USD/JPY is rebounding off technical support into the start of the month with the advance now testing the first major resistance hurdle- looking for possible inflection here. From a trading standpoint, the focus is on a breakout of the weekly opening range (149.60-151.99) for guidance with the near-term recovery vulnerable while below the 200-day moving average.
Keep in mind we get the release of key US inflation data tomorrow with the November Consumer Price Index (CPI) on tap. 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.
USD/JPY Key Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts
- Swiss Franc Short-term Outlook: USD/CHF Charge Uptrend Support
- British Pound Short-term Outlook: GBP/USD Bulls Emerge
- US Dollar Short-term Outlook: USD Bulls Eye Resistance Ahead of NFP
- Australian Dollar Short-term Outlook: AUD/USD Coils into Support
- Euro Short-term Outlook: EUR/USD Threatens Bear Market Rebound
- Gold Short-term Outlook: XAU/USD Recovery Eyes Pivotal Resistance
- Canadian Dollar Short-term Outlook: USD/CAD Trump Rally Unravels
--- Written by Michael Boutros, Sr Technical Strategist
Follow Michael on X @MBForex
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
USD/JPY Weekly Outlook: AI earnings could overshadow the Fed and BoJ
AI sentiment has become a major driver of US Treasury yields and USD/JPY. With Microsoft, Alphabet and Amazon reporting this week, central bank decisions may have competition for traders' attention.
USD/JPY Forecast: Is Rising Japanese Inflation Supporting the Yen?
As the trading week comes to an end, one of the most relevant developments in the FX market has been the renewed strength of the Japanese yen. This can be seen in the recent performance of USD/JPY, which has fallen nearly 1.0% over the last two trading sessions, highlighting a meaningful recovery in the Japanese currency against the U.S. dollar.
US Dollar Price Action Setups: EUR/USD, USD/JPY, GBP/USD, USD/CAD
The Dollar is working on its second consecutive red week and while sellers didn’t exactly pounce on fresh lows, there’s an opening door for bears to make a move.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.