Japanese Yen Short-term Outlook: USD/JPY Stalls into US Election, Fed

Japanese Yen Technical Forecast: USD/JPY Daily / 240min Trade Levels

• USD/JPY threatens to snap five-week winning streak- US Presidential Election / Fed Rate Decision on tap
• USD/JPY rally stalls into technical resistance- monthly opening-range taking shape below
• Resistance 153.02/40 (key), 154.89, 157.16- Support 151.51/94, 148.73-149.60 (key), 146.42/65

The US Dollar surged more than 10.2% against the Japanese Yen since the September/ yearly lows in USD/JPY, with the rally exhausting into technical resistance last month. The focus into the November open is on possible inflection off this zone with the US Presidential Election and the FOMC interest rate decision likely to fuel increased volatility into the close of the week. Battle lines drawn on the USD/JPY daily & 240min technical charts.

Japanese Yen Price Chart – USD/JPY Daily

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

Technical Outlook: In my last Japanese Yen Technical Forecast we noted that USD/JPY was testing key technical resistance and that, “losses should be limited to the 200 DMA IF Price is heading for a breakout with a close above 153.40 needed to mark uptrend resumption.” USD/JPY has held resistance for over a week now with the November range highs now defined by the 153.02/40 technical zone- a region defined by the May low-day close (LDC) and the 61.8% retracement of the yearly range. The focus is on a reaction off this mark with the monthly opening-range taking shape just below- US elections / Federal Reserve on tap.

Japanese Yen Price Chart – USD/JPY 240min

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

A closer look at the 240min chart shows USD/JPY trading within the confines of a proposed descending pitchfork extending off the October high. Initial support rests with the highlighted median-line confluence around the 200-day moving average near ~151.60s- a break / close below this threshold would threaten a larger correction within the broader September uptrend with subsequent support eyed at the 2022 weekly high-close at 149.60 and the 2023 high-week close (HWC) at 148.73- both areas of interest for possible downside exhaustion / price inflection If reached. Broader bullish invalidation now raised to the February low-day close (LDC) / August LWC at 146.42/65.

A topside breach / close above 153.40 is needed to mark uptrend resumption with subsequent resistance objectives eyed at the June LDC at 154.89, the 78.6% retracement at 157.16 and the April high-close at 158.44- look for a larger reaction there IF reached.

Bottom line: The September rally in USD/JPY has extended into confluent resistance and while the medium-term outlook remains constructive, the immediate advance may be vulnerable into the November open. Ultimately, we’re on the lookout for an exhaustion low in the weeks ahead. From trading standpoint, losses should be limited to 148.73 for the September uptrend to remain viable with a breach / close above 153.40 needed to fuel the next leg in price.

Keep in mind the US elections and the Fed interest rate decisions are on tap into the November opening-range. Stay nimble into the releases and watch the weekly closes here for guidance.

USD/JPY Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

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--- Written by Michael Boutros, Sr Technical Strategist

Follow Michael on X @MBForex