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Japanese Yen Technical Forecast: USD/JPY Bulls Try for January High

Japanese Yen Technical Price Forecast: USD/JPY Weekly Trade Levels

  • Japanese Yen technical trade levels update – Weekly Chart
  • USD/JPY rallies back above yearly open- key resistance at five year highs
  • Support 115.09, 114.55, 113.48 (critical)- Resistance at 116.08, 116.90
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The US Dollar is trading just below multi-year highs against the against the Japanese Yen with USD/JPY continuing to range around the 2022 yearly open. While the broader focus remains constructive, the immediate advance may be vulnerable again here and we’re on the lookout for possible price inflection just higher. These are the updated targets and invalidation levels that matter on the USD/JPY weekly price chart.Review my latest Weekly Strategy Webinar for an in-depth breakdown of this USD/JPY technical setup and more.

Japanese Yen Price Chart – USD/JPY Weekly

Japanese Yen Price Chart - USD/JPY Weekly - US Dollar vs Yen Trade Outlook - USDJPY Technical Forecast

Chart Prepared by Michael Boutros, Technical Strategist; USD/JPY on Tradingview

Notes: In my last Japanese Yen Weekly Price Outlook we noted that, “The USD/JPY rally is testing confluent resistance around the 116-handle into the start of the month / year – looking for possible inflection here for guidance.” That ended up being the high with USD/JPY plummeting more than 2.4% in the following weeks. A multi-week advance off the January low once again has price eyeing key resistance into the yearly range highs. The yearly opening-range is set.

Weekly resistance remains steady at the August 2015 swing low at 116.08 a breach / weekly close above this threshold is needed to mark resumption of the broader uptrend towards the 2017 high-week close at 116.90 and the December 2016 high-week close at 117.90 (look for a larger reaction there IF reached). Initial weekly support now rests with the objective yearly open at 115.09 backed by the 2018 high at 114.55. Broader bullish invalidation now raised to the yearly range lows which converges on the lower parallel at 113.48.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line: USD/JPY is once again approaching resistance at the yearly highs- risk for some exhaustion within the broader uptrend. From a trading standpoint, it may be prudent to reduce long-exposure / raise protective stops on a stretch towards 116- intra-week losses should be limited to 114.55 IF price is indeed heading higher with a breach likely to fuel a rally to fresh multi-year highs. I’ll publish an updated Japanese Yen Price Outlook once we get further clarity on the near-term USD/JPY technical trade levels.

Japanese Yen Trader Sentiment – USD/JPY Price Chart

Japanese Yen Trader Sentiment - USD/JPY Price Chart - US Dollar vs Japanese Yen Retail Positioning - Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-short USD/JPY – the ratio stands at -2.18 (31.48% of traders are long) – typically bullish reading
  • Long positions are21.52% higher than yesterday and 16.73% lower from last week
  • Short positions are7.35% higher than yesterday and 5.77% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. Traders are less net-short than yesterday but more net-short from last week. The combination of current positioning and recent changes gives us a further mixed USD/JPY trading bias from a sentiment standpoint.

US / Japan Economic Calendar

Key US / Japan Economic Data Releases - USD/JPY Weekly Event Risk - Retail Sales / Inflation

Economic Calendarlatest economic developments and upcoming event risk.

Previous Weekly Technical Charts

— Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex