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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • What are some trading takeaways from 2020, as we jump into the new year? Find out with your free guide here: https://t.co/e7udCTJlmf #DailyfxGuides https://t.co/9bsQkh2WMF
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/DJccj3qiig
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/UK4E7wD6s8
  • Copper is on track to make a sixth consecutive monthly gain as prices inch towards its all-time high. The global backdrop remains supportive despite a short-term pause in the rally. Get your market update from @FxWestwater here:https://t.co/STEYeIG042 https://t.co/R794ENkS3c
  • Retail trader signals still hint that the Dow Jones and S&P 500 may be at risk, placing the focus on year-long rising trendlines to see if dominant upside biases hold.Get your market update from @ddubrovskyFX here:https://t.co/lFpzIFNmzW https://t.co/FoHTLDJWJe
  • The path for the Japanese Yen seems to favor the downside looking at a majors-based index. USD/JPY may rise within its Ascending Channel, but there is some scope for a healthy correction. Get your market update from @ddubrovskyFX here:https://t.co/7XFJiCYYEM https://t.co/KfLyB2t1jP
  • The British Pound’s recent slip lower against its major counterparts may prove short-lived. Key levels to watch for GBP/USD, GBP/JPY, GBP/CHF and EUR/GBP. Get your $GBP market update from @DanielGMoss here:https://t.co/Y48cF2qi9M https://t.co/ia3Bgq0ZTp
  • Senate Democrats reach deal on jobless aid -BBG
  • The US Dollar faces its next key tests against ASEAN FX following gains in USD/SGD, USD/IDR, USD/PHP and USD/THB. Are the breakouts losing momentum? Get your market update from @ddubrovskyFX here:https://t.co/joPnWIcxEN https://t.co/4QAlUyD98V
  • Heads Up:🇨🇳 National People's Congress due at 00:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-03-06
USD/JPY Technical Analysis: It Could Get Scary Below These Levels

USD/JPY Technical Analysis: It Could Get Scary Below These Levels

Tyler Yell, CMT, Currency Strategist

What can traders expect from USD/JPY in a year of US rate hikes? Here are our thoughts.

Talking Points:

  • USD/JPY technical strategy: a close < 110 on closing shifts basis to bearish
  • Breakdown < 110 could signal JPY strength toward 107/08 per USD
  • USD/JPY testing November trend line and Ichimoku cloud base

Trading is not supposed to be easy. Of course, the rewards for those who can crack the code make an effort worthwhile, but work and adaptation is required. That truth is made apparent when looking at the ever-fluent environment surrounding USD/JPY.

USD/JPY is near proof that such a dynamic exists as the market goes from one belief to another about the economic realities of the world that shifts expectations about global capital flow. After a Q4 in 2017 that seemed markets could only go up (a la Bitcoin), USD/JPY has spent much of 2017 retracing its meteoric rise. Now, USD/JPY is testing multiple forms of key support on the chart, and if the support zones break, it may indicate more JPY strength is on its way.

The slog lower in USD/JPY on the back of disappointing US economic performance that casts doubt that the Fed will aggressively hike at the same time they look to reduce their $4.5T balance sheet holdings has left traders moving out of USD and into other markets. If this trend continues or we find next week that the Fed is going to tone down their expectations for future hikes on Friday’s NFP-miss, which aligns with our economic misses could allow USD/JPY to likely break below the key support at 110.00/50.

The chart below can help illustrate the amount of support at play near 110.00/50. To name a few, the 200-DMA currently sits at 110.18 along with a Trendline drawn off the pivotal November 9 low, which marked a shift in how traders viewed the global economy. There is also a 61.8% Fibonacci retracement level at 110.51, which tends to act as strong support in an uptrend (if it is an uptrend) and the Fibonacci level aligns with the base of the Ichimoku Cloud.

Should these levels hold, it is fair to say we could see a return of the well-missed USD strength and an eventual daily close above 112 would turn focus to 114.37+. However, a failure at these levels and a move lower would turn focus sharply on the (current) 2017 low of 108.13, which may not hold if risk-on sentiment sours.

Join Tyler in his Daily Closing Bell webinars at 3 pm ET to discuss market developments.

USD/JPY Technical Analysis: It Could Get Scary Below These Levels

Chart Created by Tyler Yell, CMT

USD/JPY IG Trader Sentiment: Yen likely to stay strong versus USD per IG Sentiment

USD/JPY Technical Analysis: It Could Get Scary Below These Levels

What do retail traders’ buy/sell decisions hint about the JPY trend? Find out here!

USDJPY: As of June 05, retail trader data shows 64.6% of traders are net-long with the ratio of traders long to short at 1.83 to 1. In fact, traders have remained net-long since May 17 when USDJPY traded near 113.64; the price has moved 2.7% lower since then. The number of traders net-long is 4.5% higher than yesterday and 15.7% higher from last week, while the number of traders net-short is 22.5% higher than yesterday and 3.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed USDJPY trading bias. (Emphasis Mine)

The takeaway to me for IG Client Sentiment on USD/JPY is that longs are getting more aggressive on a daily and week-over-week basis. In taking a contrarian view, this opens up the likelihood of further breakdown continuing Wednesday’s price action. A break below the levels mentioned above at 110.00/50 with this sentiment picture holding could precede an aggressive breakdown.

---

Shorter-Term USD/JPY Technical Levels: Monday, June 05, 2017

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.

USD/JPY Technical Analysis: It Could Get Scary Below These Levels

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

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

DISCLOSURES