JPY Technical Analysis into BoJ: USD/JPY, EUR/JPY, GBP/JPY

Japanese Yen Talking Points:

• USD/JPY has snapped back after finding resistance at 144.00 last Friday. EUR/JPY has similarly snapped back from a resistance test at a bearish trendline looked at last week.
• The big driver for the Yen this week is the Wednesday night/Thursday morning BoJ rate decision. Given the uncertainty around tariffs I think the traditionally conservative BoJ will stand pat, but it’s a quarterly meeting meaning updated projections. When these were last released on January 27^th, it fired a fresh lower-low in USD/JPY when the pair was trading around the 156.00 level, and USD/JPY has been spiraling lower ever since.

USD/JPY put in a sizable bounce last week after sellers failed to hold the break at the 140.00 level, with the 144.00 handle coming in to retain the highs on Friday. So far this week, however, Yen bulls are back at it and both USD/JPY and EUR/JPY have shown notable moves lower.

It’s a big week for the Japanese Yen as we hear from the Bank of Japan on Wednesday night (Thursday morning in Japan). The traditionally conservative Central Bank seems likely to avoid any near-term rate moves given the brash uncertainty around tariffs. But, that doesn’t mean this meeting will be a non-event as it’s a quarterly meeting, and that means updated outlooks and guidance which when last released from the BoJ on January 27^th, created a notable move of Yen-strength that’s largely remained in control ever since.

In USD/JPY, the pair pushed down to a fresh lower-low on Jan 27^th, following a hold at a lower-high. That then produced another lower-high and the pair continued to fall from the 155/156 area of the chart all the way until last week’s test of the 140.00 level.

 

USD/JPY Daily Chart

Chart prepared by James Stanley; data derived from Tradingview

 

USD/JPY and Bear Traps

 

Despite the sell-off that’s spanned for much of this year, there’s still been several bear traps brewed along the way. The 145.00 level is a great example of such, as this price came into play as support earlier in April and held the lows on multiple tests until sellers were finally able to break through. For those running breakout strategies on tests through 145.00, that probably meant multiple failed attempts until one finally took hold. And then last week’s 140.00 test was similar, as the pair just briefly sat below the big figure before snapping back and, eventually, running 400 pips higher.

On a shorter-term basis, there could be a nearby level of note to look for lower-high resistance to show around the 143.22-143.25 area; and on a bigger picture basis, it’s that 145.00 level that stands out as resistance potential as that price had shown for support numerous time before ultimately giving way. To date, it still hasn’t shown as resistance and if it can come into play, that becomes a massive spot to gauge sellers motivation in continuing the move.

That said, I still think Yen-strength could be more attractive against the Euro; and Yen-weakness more attractive against the British Pound with both markets looked at below.

USD/JPY Four-Hour Price Chart

 Chart prepared by James Stanley; data derived from Tradingview

 

EUR/JPY

 

EUR/JPY has spent the past six weeks showing resistance at a big area on the chart, spanning from 163.00-163.38. The latter price is the 23.6% retracement of the 2022-2024 major move and last week, there was also a trendline in-play as discussed in these articles. That trendline held the highs on Friday and it’s largely been a one-way show ever since.

 

EUR/JPY Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

 

EUR/JPY Shorter-Term

The move ever since the trendline inflection has been brisk and one-sided, and those are the types of moves that can be challenging to chase. From the below two-hour chart, I’ve highlighted an area of interest for shorter-term lower-highs, around 162.68; and if that doesn’t hold, then the 163.00 level could come back as a point of interest for bearish continuation scenarios.

 

EUR/JPY Two Hour Price Chart

Chart prepared by James Stanley; data derived from Tradingview

 

GBP/JPY

 

In last week’s JPY article I looked at GBP/JPY for Yen-weakness scenarios and that still remains of interest, at this point, Given the Yen-strength that’s shown against both the Euro and US Dollar, the GBP/JPY daily chart shows a more moderate pullback and this retains the bullish structure looked at last week.

The ascending triangle breakout had a support test at 190.00 on Friday, which then led to a fresh high. Ideally at this point buyers would hold support above that 190.00 level, exhibiting some element of anticipation or defense of the big figure, and the 190.31 level would be an optimal level for such a reading to show. If it doesn’t, however, and price does dip down for another 190.00 test, the key will be gauging a bullish response to illustrate buyers defense of the big figure. I would want to see a strong reaction to the pair trading below that level, with values in the 189’s eliciting an aggressive reaction from bulls. If that’s not there, then I’d expect Yen-strength to be carrying a heavier weight which would make the above setup in EUR/JPY as a more attractive venue.

 

GBP/JPY Daily Price Chart

 Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist

Japanese Yen Talking Points:

• USD/JPY has snapped back after finding resistance at 144.00 last Friday. EUR/JPY has similarly snapped back from a resistance test at a bearish trendline looked at last week.
• The big driver for the Yen this week is the Wednesday night/Thursday morning BoJ rate decision. Given the uncertainty around tariffs I think the traditionally conservative BoJ will stand pat, but it’s a quarterly meeting meaning updated projections. When these were last released on January 27^th, it fired a fresh lower-low in USD/JPY when the pair was trading around the 156.00 level, and USD/JPY has been spiraling lower ever since.

USD/JPY put in a sizable bounce last week after sellers failed to hold the break at the 140.00 level, with the 144.00 handle coming in to retain the highs on Friday. So far this week, however, Yen bulls are back at it and both USD/JPY and EUR/JPY have shown notable moves lower.

It’s a big week for the Japanese Yen as we hear from the Bank of Japan on Wednesday night (Thursday morning in Japan). The traditionally conservative Central Bank seems likely to avoid any near-term rate moves given the brash uncertainty around tariffs. But, that doesn’t mean this meeting will be a non-event as it’s a quarterly meeting, and that means updated outlooks and guidance which when last released from the BoJ on January 27^th, created a notable move of Yen-strength that’s largely remained in control ever since.

In USD/JPY, the pair pushed down to a fresh lower-low on Jan 27^th, following a hold at a lower-high. That then produced another lower-high and the pair continued to fall from the 155/156 area of the chart all the way until last week’s test of the 140.00 level.

 

USD/JPY Daily Chart

Chart prepared by James Stanley; data derived from Tradingview

 

USD/JPY and Bear Traps

 

Despite the sell-off that’s spanned for much of this year, there’s still been several bear traps brewed along the way. The 145.00 level is a great example of such, as this price came into play as support earlier in April and held the lows on multiple tests until sellers were finally able to break through. For those running breakout strategies on tests through 145.00, that probably meant multiple failed attempts until one finally took hold. And then last week’s 140.00 test was similar, as the pair just briefly sat below the big figure before snapping back and, eventually, running 400 pips higher.

On a shorter-term basis, there could be a nearby level of note to look for lower-high resistance to show around the 143.22-143.25 area; and on a bigger picture basis, it’s that 145.00 level that stands out as resistance potential as that price had shown for support numerous time before ultimately giving way. To date, it still hasn’t shown as resistance and if it can come into play, that becomes a massive spot to gauge sellers motivation in continuing the move.

That said, I still think Yen-strength could be more attractive against the Euro; and Yen-weakness more attractive against the British Pound with both markets looked at below.

USD/JPY Four-Hour Price Chart

 Chart prepared by James Stanley; data derived from Tradingview

 

EUR/JPY

 

EUR/JPY has spent the past six weeks showing resistance at a big area on the chart, spanning from 163.00-163.38. The latter price is the 23.6% retracement of the 2022-2024 major move and last week, there was also a trendline in-play as discussed in these articles. That trendline held the highs on Friday and it’s largely been a one-way show ever since.

 

EUR/JPY Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

 

EUR/JPY Shorter-Term

The move ever since the trendline inflection has been brisk and one-sided, and those are the types of moves that can be challenging to chase. From the below two-hour chart, I’ve highlighted an area of interest for shorter-term lower-highs, around 162.68; and if that doesn’t hold, then the 163.00 level could come back as a point of interest for bearish continuation scenarios.

 

EUR/JPY Two Hour Price Chart

Chart prepared by James Stanley; data derived from Tradingview

 

GBP/JPY

 

In last week’s JPY article I looked at GBP/JPY for Yen-weakness scenarios and that still remains of interest, at this point, Given the Yen-strength that’s shown against both the Euro and US Dollar, the GBP/JPY daily chart shows a more moderate pullback and this retains the bullish structure looked at last week.

The ascending triangle breakout had a support test at 190.00 on Friday, which then led to a fresh high. Ideally at this point buyers would hold support above that 190.00 level, exhibiting some element of anticipation or defense of the big figure, and the 190.31 level would be an optimal level for such a reading to show. If it doesn’t, however, and price does dip down for another 190.00 test, the key will be gauging a bullish response to illustrate buyers defense of the big figure. I would want to see a strong reaction to the pair trading below that level, with values in the 189’s eliciting an aggressive reaction from bulls. If that’s not there, then I’d expect Yen-strength to be carrying a heavier weight which would make the above setup in EUR/JPY as a more attractive venue.

 

GBP/JPY Daily Price Chart

 Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist