Japanese Yen Technical Analysis: USD/JPY, EUR/JPY, GBP/JPY

Japanese Yen Talking Points:

• While it’s been very volatile across FX markets USD/JPY has been relatively quiet, so far this week.
• USD/JPY has so far held a big spot of support, at the zone from 153.41-153.75, but EUR/JPY has broken-below a massive support level of 160.00 and GBP/JPY has held support at 190.00, setting up some interesting inter-play between the Euro and British Pound.
• I’ll be looking into all three pairs along with several other FX markets in tomorrow’s webinar. Click here for registration information.

Video

Considering the USD volatility that’s shown elsewhere, it’s been a quiet start to the week for USD/JPY. But notably, the pair is working on a second higher-low on the daily chart following Friday’s defense of the support zone spanned from 153.41-153.75.

As noted in the video above, USD/JPY could be a point of interest for USD-strength scenarios that could allow one to sidestep some of the drama around tariff talks, which have dominated the headlines. I looked into EUR/USD earlier today and already the pair has posed a brisk move off of a resistance zone at 1.0333-1.0343, and that pair will likely continue to be driven by news items around the tariff topic. A simple comment or tweet from Trump could roil pullbacks in the pair there, but USD/JPY could remove some of that exposure as President Trump hasn’t mentioned much about Japan, of late, which is likely playing into the lower volatility that’s shown in the USD/JPY pair so far this week.

From the daily chart, the support zone at 153.41-153.75 remains the big spot that bulls have defended so far. The 155.00 level is in-play again but notably, this week has seen both a higher-high and a higher-low, which could be opening the door for a deeper bounce move.

On the upside of price, it’s the Fibonacci level at 156.67 that looms large.

UJSDJPY AD

USD/JPY Daily Price Chart

EUR/JPY

For traders looking for Yen-strength, EUR/JPY could be more attractive given the current backdrop, and the tariff topic is likely making a big drive here so this would not remove the exposure of the tariff scenario. But – EUR/JPY had previously defended the 160.00 level on numerous occasions, including a couple weeks ago after BoJ Governor Ueda started to signal rate hike potential at the bank’s meeting coming up a week later.

More recently, the 160.00 level was in-play last week to hold the lows and that led to a bounce up to the Fibonacci level at 161.44. But that resistance held and to open this week sellers pushed a breakdown and a fresh monthly low in the pair, with support showing at the 23.6% retracement of that same major move.

At this point, the 160.00 level is now resistance potential in the pair after coming in as support on multiple occasions over the past month.

EUR/JPY Four-Hour Price Chart

GBP/JPY

While EUR/JPY has given up the support that held the lows through the month of January, GBP/JPY has put in a strong bounce from its own psychological level of prior support. In GBP/JPY, that price was 190.00 and it was vigorously defended in mid-January when it was last in-play.

At this point there’s a few hours left until the daily close but already the bulk of the prior sell-off has been erased, and GBP/JPY has an even more bullish look on the daily than both EUR/JPY and USD/JPY above.

GBP/JPY Daily Chart

GBP/JPY Shorter-Term

At this point I’d considering GBP/JPY as more attractive for Yen-weakness setups, and from the two-hour chart and below, there’s a recent pattern of higher-highs and lows to work off of.

Prior short-term resistance at 191.20 sets the line-in-the-sand for higher-lows for bullish continuation, and 193.00 is the next major spot of resistance overhead. That’s followed by the 193.61 level that makes up the bottom side of a longer-term zone that’s remained relevant in the pair, most recently helping to carve-out highs in late-January.

GBP/JPY Two-Hour Price Chart

--- written by James Stanley, Senior Strategist