Japanese Yen Technical Forecast: USD/JPY Not Dead Yet

Japanese Yen Technical Forecast: USD/JPY Weekly Trade Levels

• Japanese Yen poised for the largest weekly decline (USD/JPY advance) since August 2022
• USD/JPY rebound off yearly 52-week moving average approaching initial resistance
• Resistance 144.70, 147.45, 148.73-149.60 – Support 140.79, 136.65-137.24 (key), 134

The Japanese Yen is on the defensive into the yearly open with USD/JPY rallying more than 2.7% this week. A rebound off the yearly moving average has offered some support for the bulls with the immediate focus on possible price inflection just higher. These are the updated targets and invalidation levels that matter on the USD/JPY weekly technical chart.

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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, “broken significant, multi-month uptrend support and threatens a deeper correction in the weeks ahead. Initial weekly support rests with the 38.2% retracement of the yearly range at 142.48 and is backed closely by the 52-week moving average (currently ~140.05).” USD/JPY plunged another 3% in the following weeks with the decline registering an intra-day low at 140.25 into the close of the year.  

A rebound off the 52-week moving average is now in focus with the advance already testing initial resistance here at 144.70. Subsequent resistance is eyed at the 61.8% Fibonacci retracement f the November decline at 147.45 with medium-term bearish invalidation now lowered to the 2022 high-close / 2023 high-week close at 148.73-149.60 -  rallies should be limited to this threshold IF price is heading lower here. Ultimately, a breach / weekly close above the 152-handle is needed to mark uptrend resumption.

A break below the yearly-moving average (currently 147.79) would threaten a test of more significant technical support at 136.65-137.24- a region defined by the 61.8% retracement of the 2023 range and the July swing low. Note that this zone converges on multi-year upslope support over the next few weeks and further highlight its technical significance. Look for a larger reaction there IF reached.

Bottom line: USD/JPY has plunged nearly 7.7% off the November highs with the immediate focus on this rebound off the 52-week moving average. From a trading standpoint, we’re on the lookout for possible topside exhaustion while below 149.60 – losses should be limited to the yearly open (141.02) IF price is heading higher on this stretch. Stay nimble into the monthly opening-range and watch the weekly close – US Non-Farm Payrolls (NFP) on tap tomorrow. I’ll publish and updated Japanese Yen Short-term Outlook once we get further clarity on the near-term USD/JPY technical trade levels.

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

Follow Michael on X @MBForex