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USDJPY Price Outlook: Sell-Off May Not be Finished Yet

USDJPY Price Outlook: Sell-Off May Not be Finished Yet

Nick Cawley, Senior Strategist
What's on this page

USDJPY Price, Chart and Analysis

  • USDJPY eyes a fresh four-month low.
  • US durable goods data may be the catalyst for the next move.

Q2 2019 JPY and USD Forecasts andTop Trading Opportunities

USDJPY Bear Candle Stokes Negative Sentiment

USDJPY price action Thursday, when the pair fell nearly 1 big figure, has left the daily chart looking negative and on-course to attempt lows seen at the start of February. Fundamental drivers aiding the move include collapsing risk sentiment and weaker global growth fears.

The USDJPY rebound off the May 13 interim low at 109.02 all the way back to 110.67, hit a sharp reversal yesterday on a perfect mini-storm off a heightened risk sentiment – aiding the Japanese Yen – and a poor set of US PMIs which hit multi-year lows. The US dollar was breaching a two-year high ahead of the data, but post-release fell sharply and currently trades below Thursday’s close. Ahead US durable goods data at 12.30 GMT will be closely watched for any further signs that the US economy is slowing down. Market are expecting a headline reading of -2.0% in April, compared to a prior month’s +2.6%.

US PMI Figures Miss Pushing Treasury Yields to 2019 Lows

The daily chart highlights a series of horizontal support levels as the pair slip lower Friday. Initial support is at the May 13 low at 109.02 followed by the January 31 swing-low at 108.50. A break and close below here would confirm the bearish turnaround and suggest sub-108 price action. To the upside the area between 109.75 and 109.81 ahead of 110.02.

IG Client Sentiment data also paints a negative picture for the pair with 68.1% of traders long USDJPY, a bearish contrarian bias signal. In addition, recent daily and weekly positional changes give us a stronger negative USDJPY sentiment.

USDJPY Daily Price Chart (June 2018 – May 24, 2019)

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on USDJPY – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at or via Twitter @nickcawley1.

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