Japanese Yen Outlook: USD/JPY April Range Break Plunges to Fresh Lows

2020-04-30 15:00:00

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Japanese Yen Technical Price Outlook: Near-term Trade Levels
Japanese Yen Price Chart – USD/JPY Daily
Japanese Yen Price Chart – USD/JPY 120min
Japanese Yen Trader Sentiment – USD/JPY Price Chart
Key US / Japan Data Releases
Active Trade Setups

Japanese Yen Technical Price Outlook: Near-term Trade Levels

Japanese Yen technical trade levels update – Daily & Intraday Charts
USD/JPY immediate focus is on a break of weekly / monthly opening-ranges
Broader outlook vulnerable while below yearly open resistance at 108.62

The Japanese Yen is poised to mark the seventh consecutive daily advance against the US Dollar with USD/JPY breaking to fresh monthly lows ahead of the April close. While the risk remains weighted to the downside, the decline is now testing near-term support and the focus is on a reaction off this level. These are the updated targets and invalidation levels that matter on the USD/JPY technical price charts. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Yen trade setup and more.

Japanese Yen Price Chart – USD/JPY Daily

Chart Prepared by Michael Boutros, Technical Strategist; USD/JPY on Tradingview

Techncial Outlook: In last month’s Japanese Yen Price Outlook we noted that the, “immediate focus is on a break of the monthly opening-range. That said, from a trading standpoint, look for topside exhaustion while below the yearly open IF price is indeed heading lower…” Last week’s opening-range held into the close with USD/JPY breaking below the monthly range-lows on Tuesday. The risk remains weighted to the downside while below monthly open-resistance at 107.49 with initial support eyed at the 2019 low-day close at 106.09 and the median-line of the broader descending pitchfork formation just lower near ~105.70s. Broader bearish invalidation steady at the yearly open / December lows at 108.42/62.

Japanese Yen Price Chart – USD/JPY 120min

Notes: A closer look a Yen price action shows USDJPY trading within the confines of al near-term descending pitchfork formation extending off the monthly high with the recent decline now testing the 61.5% extension of the March decline at 106.42. Initial resistance now 106.92 backed by the upper parallel / April 16th swing low at 107.16- look for exhaustion ahead of this region IF price is indeed heading lower with a break exposing subsequent support objectives at the 2019 LDC at 106.10, the median-line and the 61.8% retracement of the March rally at 105.20- look for a bigger reaction there IF reached.

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Bottom line:USD/JPY has broken below the April range lows and keeps the focus lower heading into the close of the month. That said, price is now testing initial support objectives that may offer a reprieve to the recent selling pressure. From at trading standpoint, a good region to reduce short-exposure / lower protective stops- look for topside exhaustion while on recoveries within this formation with a break / close below the 106-handle needed to keep the short-bias viable. Review my latest Japanese Yen Weekly Price Outlook for a closer look at the longer-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 -1.15 (46.48% of traders are long) – neutral reading
Long positions are1.66% lower than yesterday and 3.49% higher from last week
Short positions are 15.76% lower than yesterday and 35.94% 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 less net-short than yesterday but more net-short from last week. The combination of current positioning and recent changes gives us a further mixed USD/JPY trading bias from a sentiment standpoint.