Japanese Yen Short-term Outlook: USD/JPY Testing Pivotal Resistance at Ten-Month High

Japanese Yen Technical Forecast: USD/JPY Short-term Trade Levels

USD/JPY breaks November opening-range highs- rally extends nearly 2.3% off monthly low
Bulls now testing key pivot zone at ten-month high – Non-Farm Payrolls on tap tomorrow
Resistance 156.27/43 (key), 157.19, 157.70- Support 155, 154, 153.08/27 (key)

USD/JPY surged to ten-month highs as traders brace for volatility ahead of the September jobs report. While the broader uptrend remains intact, the advance is now testing a pivotal resistance zone, raising the risk for a possible price inflection in the days ahead. Attention turns to tomorrow’s employment data, and with recent Fed commentary highlighting a growing divide among policymakers, the report could prove decisive in shaping rate expectations into the December meeting. Battle lines are 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 my last Japanese Yen Short-term Outlook, we noted that the November opening-range was taking shape just below resistance and that, “From a trading standpoint, losses should be limited to 151.63 IF price is heading higher on this stretch with a close above 154.82 needed to fuel the next major leg of the advance.” USD/JPY broke higher on Monday with the advance now extending nearly 2.3% off the monthly low. The bulls are testing a key resistance zone today at 156.27/43- a region defined by the 2024 November high close (HDC), the April 2024 high-day close (HDC), and the 100% extension of the advance off the yearly low. Looking for a reaction into this zone with the immediate advance vulnerable while below.

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 continuing to trade within the confines of an ascending pitchfork extending off the October lows. Support now rests with the lower parallel which converges on the 155-handle over the next few days. A break below this threshold would expose a larger pullback towards the monthly open at 154 with key support / broader bullish invalidation now raised to the 10/19 high-close / the October opening-range high (ORH) at 153.08/28. Losses below this threshold would be needed to suggest a more significant high is in place and that a larger trend reversal is underway.

A topside breach / daily close above this key pivot zone could fuel another bout of accelerated gains with subsequent resistance objectives eyed at the yearly open at 157.19 and the 2025 HDC at 157.70. Note that the median-line converges on this threshold into the close of the week- look for a larger reaction there IF reached.

Bottom line: USD/JPY is testing confluent resistance today at ten-month highs with major event risk on tap. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 155 IF price is heading for a breakout on this stretch with a close above 156.43 needed to fuel the next major leg of the advance.

Keep in mind the September Non-Farm Payroll report is on tap tomorrow, and traders will be closely eyeing the first major jobs report in months. Fed Fund Futures have continued to discount the December rate decision with market participants now pricing the probability of a cut next month to just 48%. With recent Fed commentary suggesting the committee remains deeply divided on the path of interest rates and with inflation still running well-above target, employment data will be critical ahead of next month’s policy meeting. Stay nimble ahead of the release and watch the weekly close for guidance. Review my latest Japanese Yen Weekly Forecast for a closer look at the longer-term USD/JPY technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist

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