USD/JPY forecast: 151 seems plausible, 152 may be a stretch

USD/JPY is clinging to 150 despite the weaker US dollar on Tuesday, as there seems little reason for traders to bid the yen. And unless we receive a compelling reason to buy then yen via a surprisingly hawkish BOJ or broad risk-off environment, it becomes difficult to construct an overly bearish case for USD/JPY whilst the Fed remain quiet about rate cuts.

Yen futures large speculator positioning – COT report

With that said, I did outline in the weekly COT report that bearish bets against yen futures bears are near a sentiment extreme. And that does run the risk of yen futures holding above their 2023 lows, which equates to USD/JPY failing to break above its 2023 highs. Yet patience is required as this is on the weekly charts. And it doesn’t mean that USD/JPY can’t perform another leg higher towards 152 before we see a decent retracement. For now, USD/JPY remains in the ‘buy the dip’ category, given its strong trend.

USD/JPY technical analysis (daily chart)

Technically, the USD/JPY trend remains firmly bullish on the daily chart. Prices are consolidating around 150 and holding above the 10-day EMA, and a ‘spinning top’ doji formed on Tuesday to show indecision around current levels. Traders should be on guard for spikes in either direction before the ‘real move’ unfolds. But due to its dominant bullish trend, the bias remains bullish and to seek bullish setups around support levels if prices retrace lower – as a rise to 151 at a minimum seems plausible.

Note potential support levels to seek bullish setups:

149.72 (10-day EMA)
149.30 (volume cluster)
148.95 – 149 (20-day EMA, round number)

USD/JPY technical analysis (4-hour chart)

The 4-hour chart shows that USD/JPY is trading within a similar pattern to the retracement seen at the later stages of January. Note that the EMAs are fanning out in the correct bullish sequence, and retracements have been shallow during its strong bullish trend. Perhaps we'll see a dip lower at the Tokyo open, but I'd prefer to seek dips than short personally. Ultimately, USD/JPY is preferred on a 'buy the dip' basis. But the closer we get to the BOJ intervention highs / 152, the greater the odds that the market will want to naturally snap back like it did in November.

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

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. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.