Japanese Yen Short-term Technical Outlook: USD/JPY Rally Vulnerable

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Japanese Yen Technical Price Outlook: USD/JPY Short-Term Trading Levels

  • Japanese Yen updated technical trading levels – Daily & 240min chart
  • USD/JPY four-week rally stalls at uptrend resistance – risk for imminent exhaustion
  • Support 141.55, 139.41, 137 – Resistance 146.23, 147.67, 149.07

The American dollar is trying to mark a fifth consecutive weekly advance against the Japanese Yen with USD/JPY trading less than 1.5% off annual highs. While the broader outlook remains constructive, the immediate advance may be vulnerable in the coming days after a reversal of uptrend resistance. These are the updated goals and invalid levels that on the American dollar/JPY short-term chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Yen technical setup and much more!

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Japanese Yen Price Chart – USD/JPY Daily

Japanese Yen Price Chart - USD/JPY Daily - US Dollar vs. Yen Short Term Trading Outlook - Yen Technical Forecast

Chart Prepared by Michael BoutrosTechnical Strategist; USD/JPY at Tradingview

Technical Perspective: USD/JPY is trading within the confines of a broad ascending channel formation extending from the March lows with embedded. pitchfork a formation extending from the May low leading the most recent advance. The four-week rally off the August lows may threaten exhaustion here after reversing the 61.8% parallel earlier in the month with daily momentum divergence further highlighting the risk. That said, the focus is on this pullback relative to the midline and we look for a breakout of the objective weekly opening range to offer some guidance here.

Japanese Yen Price Chart – USD / JPY 240min

Japanese Yen Price Chart - USD / JPY 240min - US Dollar vs. Yen Short-Term Trading Outlook - Yen Technical Forecast

Chart Prepared by Michael BoutrosTechnical Strategist; USD/JPY at Tradingview

Notes: A closer look at USD/JPY Price action highlights yesterday’s US CPI increase, which basically defined the weekly opening range just above the midline. Break under imminent support at 141.55 would threaten a larger pullback within the uptrend to the 38.2% Fibonacci retracement of the August rally at 139.41. Finally, a break under the 137-handle would be needed to cancel the broader uptrend.

An upper break of the weekly range highs exposes subsequent ones resistance goals at the high week close of 1998 at 146.23 supported by the 1998 high at 147.67 and the 100% extension of the advance (2011) at 149.07– look for greater reaction there IF achieved.

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Bottom line: Reversal of uptrend support threatens a bull market correction – the immediate focus is on a breach of the weekly opening range for guidance. From a trading point of view, losses should be limited to the lower parallel / 137 IF price goes higher in this stretch with a break / close above 146.23 needed to clear the way. Review my latest Japanese Yen Weekly Price Outlook for a closer look at the longer-term technical trading levels of USD/JPY.

Japanese Yen Trader Sentiment – USD/JPY price chart

Japanese Yen Trader Sentiment - USD/JPY Price Chart - US Dollar vs Yen Retail Position - Short Term Technical Outlook

  • Summary of IG Customer Sentiment shows that traders are net short USD/JPY – the ratio stands at -3.23 (23.65% of traders are long) – usually bullish reading
  • Long positions are 1.83% lower than yesterday and 7.82% lower than last week
  • Short positions are 6.26% lower than yesterday and 7.40% lower than last week
  • We usually take a contrary view to crowd sentiment, and the fact that traders are net-short suggests that USD/JPY prices will continue to rise. Traders are less net-short than yesterday but more net-short than last week. The combination of current positioning and recent changes gives us an additional mixed USD/JPY trading bias of feeling point of view




of customers is network long




of customers is net short

Change into

misses

Shorts

Oi

Every day 0% -1% -1%
Every week 27% 0% 6%

US/Japan Economic Calendar

US / Japan Economic Calendar - USD/JPY Key Data Releases - USDJPY Weekly Event Risk - FOMC - Fed Interest Rate Decision

Economic Calendarlatest economic developments and upcoming event risk.

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— Written by Michael BoutrosTechnical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex



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