Never miss a story from David Cottle

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to David Cottle

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Japanese Yen Technical Analysis Talking Points:

  • USDJPY continues to gain, but needs to retake its last significant top
  • If the pair can consolidate between there and the year’s peak bulls will probably be satisfied for now
  • GBP/JPY has fallen, but perhaps not far given the UK’s dire Brexit newsflow

Get live and interactive coverage of all major Japanese economic data at the DailyFX Webinars. We’d love to have you join us.

The Japanese Yen remains on the back foot against the US Dollar but for all that USD/JPY bulls have yet to retake the key upside target they’re aiming at.

The pair has been in a clear daily chart uptrend since March 22. Gains since have taken the Dollar back above both the first and second Fibonacci retracements of its 2019 rise, levels which were both surrendered on the way down, if only briefly in the case of that second one.

US Dollar vs Japanese Yen, Daily Chart

However, for all its bullishness the Dollar has yet to top the previous significant peak on a daily closing basis. That was March 15’s 111.76.

Now admittedly that level is very close to the current market and, should the uptrend endure then a break is only a matter of time. All the same, bulls will want to see that break pretty soon, and then move on to a display of comfort in the band between it and the year’s high of 112.14

The Dollar is heading towards looking a bit overbought in the momentum stakes, but a period of consolidation within that band would probably augur well for more gains ahead.

That said there is a clear risk on the daily chart that the pair is in fact topping out below that former significant high and poised to make a potentially bearish ‘lower low.’ That in turn would put market focus back on those retracement levels as key support.

With all that in mind, where the pair closes out this week could be most instructive.

The British Pound is unsurprisingly weaker against the Japanese Yen and much else, with ongoing Brexit travails weighing on the currency.

GBP/JPY has slipped below the uptrend channel which had previously bounded trade since January 15 and was, in any case, only an extension of the bounce which began on January3. So far it’s fall has been quite modest, however, with support at 144.00 holding the bears for now.

British Pound Vs Japanese Yen, Daily Chart

Immediate daily chart resistance comes in at the former channel support of 146.74, with a retake of that suggesting a higher high from the previous significant top of 146.01. That’s a sight which might put heart into the bulls but this cross will remain very vulnerable to UK newsflow.

Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

--- Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!