News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • 🇳🇱 Consumer Confidence (SEP) Actual: -5 Previous: -6
  • A rough start to the week with the cryptocurrency market a sea of red with losses on either side of -10% a common sight.Get your market update from @nickcawley1 here:
  • RT @FxWestwater: Gold, Copper Forecast: XAU Eyes FOMC, Evergrande News Sends Copper Flying Link:…
  • Heads Up:🇳🇱 Consumer Confidence (SEP) due at 04:30 GMT (15min) Previous: -6
  • PBoC liquidity injection + reports that Evergrande will make its next onshore bond payment ($35.88-million on 23 Sept) is bolstering risk appetite here. Yet, there is still no word on the $83.53-million offshore bond payment also due Thursday. Over to you now, Jpow & Co.
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here:
  • Bank of Japan: - Outlook highly uncertain amid Covid - Asset purchase outline unchanged - Cuts assessment of production - exports, production impacted by supply side constraints - BBG
  • Heads Up:🇯🇵 BoJ Interest Rate Decision due at 03:00 GMT (15min) Previous: -0.1%
  • What is your forex trading style? Take the quiz and find out:
  • Hello there traders! @FxWestwater and I collaborated to bring you a breaking news story on China's #Evergrande coupon payment $AUDUSD $NZDUSD #AUD #NZD Check out the full story here -
Japanese Yen Forecast: USD/JPY Coiling Up For a Breakout

Japanese Yen Forecast: USD/JPY Coiling Up For a Breakout

Justin McQueen, Strategist

Japanese Yen Key Takeaways

  • USD/JPY Dips But Pay Close Attention to US Yields
  • USD/JPY Coiling for a Breakout

Risk sentiment remains on the softer side and has subsequently spilt into FX markets. In turn, this has naturally supported the safe-havens, at the expense of higher beta currencies. Although, while yesterdays moves in FX had largely been driven by the USD, today sees the Japanese Yen also gaining ground with USD/JPY heading back down to the 110.00 handle as the pair tracks US yields lower. I have said previously that the USD/JPY tracks the US 10yr yield very closely and thus when trading USD/JPY it is important to watch treasury yields, as the chart below demonstrates.

USD/JPY vs US 10Y Yield

Japanese Yen Forecast: USD/JPY Coiling Up For a Breakout

Looking at the chart, price action in the pair remains somewhat choppy having maintained a 109.50-110.50 range. Momentum is also negative for the Japanese Yen, however, some way from being considered stretched, which does pose upside risks for USD/JPY should US yields turnback higher. The pair has made a slight break above the descending trendline from the YTD peak, although a firm close above will be the main focus for bulls. On the topside, resistance sits at 110.60-70, while support resides at 109.75 and 109.50.

USD/JPY Chart: Daily Time Frame

Japanese Yen Forecast: USD/JPY Coiling Up For a Breakout

Source: Refinitiv

For now, price action is coiling up and readying for a breakout, the difficulty of course is identifying which way that will be. Therefore, I will be keeping a watchful eye on the US 10yr and where a firm break above 1.38% could see USD/JPY catapult higher, also the moves in the Nikkei 225, which has seen a strong bid since PM Suga announced he will not run in the LDP Leadership Election.

US 10yr Yield Chart: Daily Time Frame

Japanese Yen Forecast: USD/JPY Coiling Up For a Breakout

Source: Refinitiv

A Guide to Support and Resistance Trading

IG Client Sentiment Gives Stronger Bullish Contrarian Bias

Data shows 44.51% of traders are net-long with the ratio of traders short to long at 1.25 to 1. The number of traders net-long is 9.60% lower than yesterday and 0.63% higher from last week, while the number of traders net-short is 13.19% higher than yesterday and 7.11% 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 further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USD/JPY-bullish contrarian trading bias.

Japanese Yen Forecast: USD/JPY Coiling Up For a Breakout

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.