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Japanese Yen Keeps USD in Broad Range But Still Looks Pressured

Japanese Yen Keeps USD in Broad Range But Still Looks Pressured

David Cottle, Analyst


What's on this page

Japanese Yen Technical Analysis Talking Points:

  • USD/JPY has settled into a broad range, with Dollar bulls still driving
  • The pair seems likely to resume its former rise in the new year
  • NZD/JPY’s uptrend looks safe enough, even if it sees a short-term pause
USD/JPY Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 9% -13% -5%
Weekly 9% -7% -1%
What does it mean for price action?
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The Japanese Yen has settled into a broad range trade against the US Dollar which seems likely to survive the holiday season, but weakness may well resume for the Japanese currency once things pick up in 2020.

With that in mind breaks either way should probably be viewed with suspicion until then, with USD/JPY looking effectively capped by resistance quite close to the current market at 109.67.

US Dollar Vs Japanese Yen, Daily Chart

That was the last significant peak, scaled as the intraday high of December 2 and not topped since.

Range support looks comfortably far off for Dollar bulls, all the way down at 108.44. There seems very little chance of this being tested again in the near future. Any forays toward it in the next week or so will face near-term support at last week’s low of 109.19 as well as that in the 108.74 region where the pair held between December 2 and 12.

The pair has clearly fallen out of the ascending channel which had contained the market between August 26 and December 2 and the bigger question is whether the current range trade is merely an extended pause in that rise or a topping out.

At present the former scenario looks more likely, with the pair close to its range top. It will take a concerted effort by Dollar bears to break below the current range to force a rethink and that doesn’t look likely in the near term.

The New Zealand Dollar looks more unambiguously bullish against the Japanese currency, with the uptrend in place since October 10 unthreatened.

New Zealand Dollar Vs Japanese Yen, Daily Chart

That uptrend is in any case an extension and acceleration of the rise up from this year’s lows. They were made in mid -August.

The cross does seem to have settled into a narrower range within that uptrend, but, with the ascending channel base a very long way off, this need not overly concern NZD bulls.

Firm support is likely at 71.36 in any case. That’s the first, 23.6% Fiobancci retracement of the rise from the low of October 10 to December 12’s peak.

Japanese Yen 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!

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