Japanese Yen forecast: USD/JPY grinds at 2023 range resistance

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By :  ,  Sr. Technical Strategist

Japanese Yen technical forecast: USD/JPY weekly trade levels

  • Japanese Yen approaching topside of massive multi-month consolidation
  • USD/JPY rally vulnerable into 2023 range highs- risk for price inflection
  • Resistance 135.71, 136.66, 139.59– support 134.11, 131.12/30, 129.58

The Japanese Yen is off more than 0.6% against the US Dollar this week with USD/JPY trading just below resistance near the 2023 range highs. The focus is on possible inflection into this zone as price continues to consolidate within a massive multi- month consolidation pattern. These are the updated targets and invalidation levels that matter on the USD/JPY weekly technical chart.

Discuss this Yen setup and more in the Weekly Strategy Webinars on Monday’s at 8:30am EST.

Japanese Yen Price Chart – USD/JPY Weekly

Japanese Yen Price Chart  USD JPY Weekly  US Dollar vs Yen Trade Outlook  USDJPY Technical Forecast

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, “The recent USD/JPY recovery off support may be vulnerable into these upcoming resistance levels.” We specifically highlighted the 52-week moving average and, “38.2% retracement of the 2022 decline at 136.66- a breach / weekly close above this threshold is needed to mark resumption of the broader uptrend…” Price briefly registered an intraweek high at 137.77 last week but has been unable to mark a weekly close above and the immediate focus is on possible inflection off this zone.

Initial weekly support rests with the yearly high-week close at 134.12 backed by 131.12/31- a region defined by the 61.8% Fibonacci retracement of the yearly range and the objective yearly open. Broader bullish invalidation f the yearly advance remains unchanged at the 2023 low-week close at 129.58.

Initial weekly resistance levels are also unchanged at the 52-week moving average (currently ~136.08) and 136.66. Ultimately, a topside breach / close above this consolidation formation is needed to validate a breakout of the yearly opening-range highs towards the July highs at 139.39 and the key resistance at 142.50- look for a larger reaction there IF reached.

Bottom line: USD/JPY is trading just below resistance near the 2023 range highs with price continuing to contract within the confines of a massive multi-month consolidation pattern. From a trading standpoint, the trade remains constructive while above yearly open with a breach / close above the December trendline needed to fuel a larger breakout in USD/JPY.  I’ll publish an updated Japanese Yen short-term outlook once we get further clarity on the near-term USD/JPY technical trade levels.

Key Economic Data Releases

US Japan Economic Calendar - USD JPY Key Data Releases - USDJPY Weekly Event Risk - 5-12-2023

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Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on Twitter @MBForex


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