Japanese Yen Forecast: USD/JPY Poised for Breakout as Bulls Stall

Japanese Yen Technical Forecast: USD/JPY Weekly Trade Levels

USD/JPY is trading just below confluent resistance for a third consecutive week
Price holding within a tightening range into the November open- breakout to offer guidance
Government shutdown nears end, but data front remains thin- Numerous Fed speakers on tap
Resistance 154.82-155.03 (key), 156.52, 157.70- Support 151.92/95 (key), ~149.32, 148.92

USD/JPY continues to coil just below confluent resistance for a third consecutive week, with focus on a breakout of the November opening range for guidance. The economic docket remains quiet amid the ongoing government shutdown, and although an end appears in sight, key data releases are likely to lag. In the meantime, traders will look to a flurry of Fed speakers for clues on the policy outlook after weeks of uncertainty. Battle lines are drawn on the USD/JPY weekly technical chart.

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 Weekly

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 had exhausted into lateral resistance at 151.95 and that, “From a trading standpoint, a good region to reduce portions of long-exposure / raise protective stops- losses should be limited to the yearly moving average IF price is heading higher on this stretch with a close above 155 ultimately needed to fuel the next major leg of this advance.” USD/JPY dropped more than 2.5% the following week with the decline reversing just ahead of the 52-week moving average.

The subsequent rally extended more than 3.4% with price now trading just below confluent resistance at 154.82-155.03- a region defined by the 78.6% retracement of the yearly range and the 2024 November high-close. Looking for a reaction off this mark in the weeks ahead IF reached with a breach / close above needed to mark resumption of the broader uptrend. Subsequent resistance objectives eyed at the 100% extension of the April advance at 156.52, backed by the 2025 high-week close (HWC) at 157.70 and the yearly highs at 158.88.

Weekly support rests with the 2022 and 2023 swing highs at 151.92/95- a break / weekly close below this threshold would be needed to suggest a more significant high is place and that a larger correction is underway within the multi-month uptrend. Subsequent support rests with the 52-week moving average (currently ~149.32) with bullish invalidation now raised to the 38.2% retracement of the April advance at 148.92. Note that basic channel support converges on this level into the close of the month and losses below this slope would nullify the multi-month rally in USD/JPY.

Bottom line: USD/JPY is trading just below confluent resistance for a third consecutive week, and the immediate focus is on a breakout of the November opening-range for guidance. From a trading standpoint, losses should be limited to 151.92 IF price is heading for a topside break on this stretch with a close above 155 needed to fuel the next major leg higher.

Keep in mind that the economic docket remains light this week amid the ongoing government shutdown. Although the Senate voted to re-open yesterday, it will take time for key data releases to catch up after such a prolonged pause. In the meantime, a flurry of Fed speakers are scheduled over the next few days, and traders will look for insight into how policymakers view the rate path into year-end after weeks of limited data. Stay nimble until the monthly range clears and watch the weekly closes for guidance. Review my latest Japanese Yen Short-term Outlook for a closer look at the near-term USD/JPY technical trade levels.

USD/JPY Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex

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