Japanese Yen Short-Term Outlook: USD/JPY Eyes Breakout on FOMC / BoJ

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

Japanese Yen coils just below uptrend resistance ahead of FOMC / BoJ rate decisions
USD/JPY June opening-range in contraction- breakout pending
Resistance 140.33 (key), 141.30s, 142.50- support 137.36/91, 135.70, 134.08

The Japanese Yen has continued to coil just below uptrend resistance with major event risk on tap into the close of the week. The focus is on a breakout of the monthly opening-range for guidance. These are the updated targets and invalidation levels that matter on the USD/JPY short-term technical charts.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this USD/JPY technical 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 approaching, “key resistance around 137.36/90- a region defined by the yearly high / high-day close and converges on basic trendline resistance extending off the December highs.” Price ripped through this threshold in the following days with the rally exhausting into uptrend resistance into the close of May. A near-term consolidation pattern has taken shape just below and we’re looking for a breakout of the monthly opening-range for further guidance here.

Japanese Yen Price Chart – USD/JPY 240min

Chart Prepared by Michael Boutros, Sr. Technical Strategist; USD/JPY on TradingView

Notes: A closer look at Yen price action shows the USD/JPY consolidating into the June opening-range, just below uptrend resistance. A downside break of this formation would threaten a deeper correction with towards the median-line / key support back at 137.35/90- this region is now also defined by the 100% extension of the decline off the highs and the 200-day moving average (~137.28). Look for a larger reaction there IF reached.

A breach / close above the 100% extension of the yearly ascent at 140.33 is needed to mark resumption of the broader uptrend towards the upper parallel (currently 141.30s) and the 61.8% Fibonacci retracement of the 2022 decline at 142.50- an area of interest for possible topside exhaustion / price infection IF reached.

Bottom line: The USD/JPY rally is in consolidation just below uptrend resistance- looking for a breakout of the June opening-range in the days ahead. From a trading standpoint, losses should be limited by 137.28 IF price is heading higher on this stretch with a close above 140.33 needed to mark resumption of the broader uptrend. The FOMC & BoJ interest rate decisions are on tap into the close of the week- stay nimble here and watch the Friday close. Review my latest Japanese Yen Weekly Technical Forecast for a longer-term look at the USD/JPY trade levels.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Short-term Technical Charts

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

Follow Michael on Twitter @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. 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.