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Japanese Yen Short-term Outlook: USD/JPY Bulls Tested Ahead of Trump

Article By: ,  Sr. Technical Strategist
Today 7:06 PM

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

  • USD/JPY breaks January opening-range lows- threatens deeper correction within September uptrend
  • USD/JPY support in view ahead of Trump Inauguration, BoJ rate decision
  • Resistance 156.26, 157.19, 157.89-158.45 (key)- Support 154.34, 152.80s (key), 151.50/95

The US Dollar was down more than 1.7% against the Japanese Yen at the lows off the week with USD/JPY threatening a break of a multi-week range. The immediate focus is on this pullback with multi-month uptrend support in view ahead of the extended holiday break. Battle lines drawn on the USD/JPY short-term technical charts heading into the Presidential Inauguration and the BoJ next week.

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 Technical Forecast we noted that a rebound off technical support in USD/JPY was, “testing the first major resistance hurdle- looking for possible inflection here. From a trading standpoint, the focus is on a breakout of the weekly opening range (149.60-151.99) for guidance with the near-term recovery vulnerable while below the 200-day moving average.”

USD/JPY broke through resistance the following day with the rally extending nearly 6.9% off the December lows into key resistance at 157.89-158.45. A break of the January opening-range yesterday has already fallen more than 2.4% off the monthly high and the immediate focus is on this pullback towards uptrend support.

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 extending off the monthly high with price bounding off the median-line into the close of the week. Initial resistance is being tested now at the November high-close around 156.26 with near-term bearish invalidation set to the objective monthly / yearly open at 157.19. Ultimately, a breach /close above 158.45 is needed to mark uptrend resumption / fuel the next major leg of the advance towards the April high at 160.21.

Initial support rests with the November high-day close (HDC) / 23.6% retracement of the September advance at 154.32/34 and is backed by the lower parallel / 200-day moving average around 152.80s- both levels of interest for possible downside exhaustion / price inflection IF reached. Ultimately, a break / close below the 38.2% retracement / 2022 & 2023 highs at 151.50/95 would be needed to suggest a more significant high was registered last week / a lager trend reversal is underway.

Bottom line: A break of the January opening-range threatens a deeper pullback within the multi-month advance. From a trading standpoint, losses should be limited to the 200-day moving average IF price is heading higher on this stretch with a breach / close above 158.45 needed to fuel the next major leg of the advance.

Keep in mind we are heading into an extended holiday weekend with the inauguration of President Trump and the Bank of Japan (BoJ) interest rate decision on tap next week. Stay nimble here and watch the weekly closes for guidance. Review my latest Japanese Yen Weekly Forecast for a closer look at the longer-term USD/JPY technical trade levels.

USD/JPY 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

Follow Michael on X @MBForex

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