Japanese Yen Short-term Outlook: USD/JPY Tests Trend Support—Breakdown Risk Builds

This content was created by an affiliate of FOREX.com and represents the views and opinions of the author/speakers, not the views and opinions of Forex.com, StoneX Group Inc., or its subsidiaries. The content has not been independently reviewed by FOREX.com.

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

USD/JPY pulls back after failing at key resistance at fresh yearly highs into the close of March
Broader uptrend remains intact, but momentum divergence warns of vulnerability
Price is now testing trend support within a rising wedge formation- a reaction off this level could dictate the next move
Key event risk on tap into a shortened holiday week with President Trump speaking tonight and NFPs on Friday
Resistance 158.88, 159.70, 160.22/74 (key) - Support 157.33/70 (key), 156.67, 156.05

USD/JPY is turning lower after failing to sustain gains near a major resistance zone into the close of March, with the pair now marking a third consecutive daily decline. The pullback follows a strong advance off mid-month lows but comes amid growing signs of momentum divergence at recent highs. Price is now testing trend support within a rising wedge formation, a technically significant zone that could determine whether this decline remains corrective—or evolves into a larger reversal in the sessions ahead. Battle lines 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 last month’s Japanese Yen Short-term Outlook, we noted that USD/JPY was responding to near-term resistance and that, “From a trading standpoint, losses would need to be limited to 156.37 IF price is heading higher on this stretch with a close above 158.88 needed to fuel the next major leg of the advance.” USD/JPY registered an intraday low at 157.27 that day before reversing sharply higher with the advance extending more than 2% off those lows.

The rally was halted into the close of March at a key resistance barrier around the April 2024 high and the 2024 high-week close at 160.22/74. Ongoing momentum divergence into the highs suggests the multi-month advance may be vulnerable here. USD/JPY is now poised to mark a third consecutive daily decline with the price testing the lower bounds of a rising wedge formation extending off the March swing lows. We are looking for a reaction off this slope with a break / daily close below needed to invalidate this formation and suggest a larger correction is underway.

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 trading within the confines of a proposed descending pitchfork formation with price breaking below the 75% parallel yesterday. A break below the March slope would threaten a decline towards pivotal support at the 38.2% retracement of the late-February advance and the 2025 high-day close (HDC) at 157.33/70. Note that the median-line converges on this threshold into the close of the week and losses below this threshold would be needed to suggest a more significant high is in pace and a larger trend reversal is underway. Subsequent support objectives rest with the yearly open at 156.67 and the March open at 156.05.

Initial resistance is eyed at the 2025 swing high at 158.88 and is backed by near-term bearish invalidation the yearly high-day close (HDC) at 159.70. Ultimately, the bulls would need to clear the 2024 HWC at 160.74 to mark uptrend resumption and fuel the next major leg of the rally towards the 2024 high-day & high-week closes (HDC / HWC) at 161.69/95.

Bottom line: The USD/JPY is testing support at the March uptrend- looking for a reaction off this slope. From a trading standpoint, rallies would need to be limited to 159.70 IF price is indeed heading lower on this stretch with a close below the March trendline needed to fuel the next leg lower in price.

Keep in mind it is a shortened holiday week with US Non-Farm Payrolls on tap Friday. Later tonight, President Trump will be addressing the nation regarding the ongoing war in Iran. The speech has the potential to impact broader market sentiment here and could fuel added volatility in the Asia session. Stay nimble here into the monthly open 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.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.