Japanese Yen Technical Price Forecast: USD/JPY Weekly Trade Levels
- Japanese Yen technical trade levels update – Weekly Chart
- USD/JPY threatens exhaustion into uptrend resistance after six-week rally
- Support 112.40, 111.60/98 (critical)- Key resistance at 114.55/92, 116
The US Dollar snapped snaped a six-week winning streak against the Japanese Yen with USD/JPY down more than 0.3% in early New York trade on Friday. A reversal off confluent resistance threatens a larger pullback within the confines of the yearly uptrend with the Bank of Japan (BoJ) rate decision on tap next week.
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 Yen technical setup and more.
Japanese Yen Price Chart – USD/JPY Weekly
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 breakout was, “approaching a major resistance zone just higher at 114.55/92- a region defined by the 2018 swing high and the 78.6% Fibonacci retracement of late-2016 decline. Note that the median-line also converges on this threshold over the next few weeks and further highlights the technical significance of this key pivot zone.” Price registered a high at 114.70 before turning over – risk for some chop / pullback while below this threshold.
Initial weekly support rests back at the 2018 high-week close at 113.70. A close below this threshold could fuel a steeper correction in price within the broader uptrend with such a scenario exposing the 25% parallel (currently ~112.40s) and key support / bullish invalidation at 111.60/98- both levels of interest for possible downside exhaustion IF reached. A topside breach from here keeps the focus on subsequent resistance objectives at the August 2015 swing low at 116.08 and the 2017 high-week close at 116.90.
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 remains vulnerable within the confines of the yearly uptrend / while below 114.55/92. From a trading standpoint, the focus is on a possible correction towards uptrend support – ultimately a larger pullback may offer more favorable opportunities. 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
- A summary of IG Client Sentiment shows traders are net-short USD/JPY - the ratio stands at -3.33 (23.07% of traders are long) – typically bullish reading
- Long positions are4.15% lower than yesterday and 7.97% lower from last week
- Short positions are 2.52% higher than yesterday and 15.09% 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 positioning and recent changes gives us a stronger USD/JPY-bullish contrarian trading bias from a sentiment standpoint.
| Change in | Longs | Shorts | OI |
| Daily | 2% | 3% | 2% |
| Weekly | 7% | -2% | 2% |
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Key US / Japan Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Previous Weekly Technical Charts
- Australian Dollar (AUD/USD)
- Gold (XAU/USD)
- US Dollar Index (DXY)
- Canadian Dollar (USD/CAD)
- Euro (EUR/USD)
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex
https://www.dailyfx.com/us-dollar-index?ref-author=Boutros
