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Japanese Yen Technical Forecast: USD/JPY Surges to Multi-Decade High

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

  • Japanese Yen technical trade levels update – Weekly Chart
  • USD/JPY breakout approaching uptrend resistance at multi-decade highs
  • Support 125.60, 127.09 (key), 125.57 – Resistance 132.24 (key), 134.66, 136
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The US Dollar surged more than 14.5% against the Japanese Yen year-to-date with USD/JPY now probing fresh multi-decade highs. The rally takes price towards confluent uptrend resistance and while the broader outlook remains constructive, the immediate advance may be vulnerable in the days ahead. 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: USD/JPY has been trading within the confines of a broad multi-year ascending pitchfork formation extending off the 2016 & 2021 lows (blue) with an embedded ascending channel guiding the 2021 advance. A pair of parallels (red) extending off the 2020 highs converges on resistance zones around the 78.6% Fibonacci retracement of the broader 1998 decline at 132.24 and the 2002 high-close at 134.66– both zones of interest for possible topside exhaustion IF reached. Monthly-open support rests at 128.60 backed by the May low-week close at 127.09– we’ll reserve this threshold as our medium-term bullish invalidation zone.

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

Bottom line: The USD/JPY breakout is approaching confluent uptrend resistance- risk for near-term exhaustion. From at trading standpoint, look to reduce portions of long-exposure / raise protective stops on a stretch towards 132.24- losses should be limited to the monthly open IF the price is heading higher on this stretch with a weekly close above needed to keep the long-bias viable. Stay nimble heading into the close of the week with key US Inflation data on tap Friday likely to fuel some volatility here. 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 - Retail Positioning - Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-short USD/JPY – the ratio stands at -2.65 (27.37% of traders are long) – typically bullish reading
  • Long positions are19.28% higher than yesterday and 1.40% lower from last week
  • Short positions are4.62% higher than yesterday and 12.42% 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

US / Japan Economic Calendar - USD/JPY Key Data Releases - Weekly Event Risk

Economic Calendarlatest economic developments and upcoming event risk.

Active Weekly Technical Charts

— Written by Michael Boutros, Technical Strategist with DailyFX

Follow Michael on Twitter @MBForex