Open an Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an Account
✖

Japanese Yen Technical Analysis: USD/JPY Slam Continues, Where's the Low?

Article By: ,  Sr. Strategist
July 13, 2023 3:46 PM

Japanese Yen Talking Points:

  • USD/JPY is working on its sixth consecutive daily loss and has now erased all gains from June.
  • The US Dollar has been similarly slammed down with a fresh yearly low in DXY, and the natural question now, in both markets but of particular importance for the matter on USD/JPY, is where support may eventually show.
  • This article includes an archived webinar from today. You’re welcome to join these in the future as they’re hosted every Tuesday at 1PM ET. Click here to register.

 

The crowded traded has just become a bit less so.

USD/JPY was testing the 145 level as we came into Q3 and that held for a few days, with bulls holding higher-low supports until a series of lower-highs started to show.

That led into a snap back move with USD/JPY pushing down to the 140 handle, and then yesterday’s CPI data out of the United States pushed the USD over the ledge of support, leading to further breakdown and pulling USD/JPY along with it. A day later and that bearish USD theme is continuing to push, and USD/JPY has continued to drive below a number of supports at 138.75 or 138.25.

There’s another major level nearing, and it has a bit of historical reference as this was a swing-low late last year that came in as resistance on three separate occasions after. Most recently, this level held the highs in early-May, as USD/JPY was pushing for a bullish breakout after the first rate decision at the BoJ with newly-installed Governor Kazuo Ueda.

This plots at 137.68, and it’s been pertinent a few times already this year; perhaps this can be the level that begins to stall this recent bearish breakdown.

If that doesn’t hold? There’s not much for nearby support until we get around the 135 handle. And the carry on the pair is still tilted to the long side, so if bulls can substantiate a bit of support, there could be motive for shorts to cover along with the possibility of bullish impetus on the basis of the rate disparity. But, for now this is dropping like a rock and it hasn’t yet shown a willingness to stop.

 

USD/JPY Daily Price Chart

 

Chart prepared by James Stanley, USD/JPY on Tradingview

 

--- written by James Stanley, Senior Strategist

 

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.

© FOREX.COM 2024