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Yen Forecast: USD/JPY Rips to Key Resistance Pivot at Fresh 2021 High

Yen Forecast: USD/JPY Rips to Key Resistance Pivot at Fresh 2021 High

Michael Boutros, Strategist

Japanese Yen Technical Price Forecast: USD/JPY Weekly Trade Levels

  • Japanese Yen technical trade levels update – Weekly Chart
  • USD/JPY surges into key resistance zone at fresh yearly highs
  • Support 114.05, 113.20, 111.60/98 (critical)- Key resistance at 114.55/92, 116
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The US Dollar surged for a second weekly advance against the Japanese Yen with USD/JPY ripping into resistance at fresh yearly highs. While the broader focus remains constructive, the rally may be vulnerable in the days ahead into this critical zone. These are the updated targets and invalidation levels that matter on the USD/JPY weekly price chart. Review my latest Weekly Strategy Webinar for an in-depth breakdown of this Yen technical setup and more.

Japanese Yen Price Chart – USD/JPY Weekly

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

Notes: In my last Japanese Yen Weekly Price Outlook we noted that the USD/JPY breakout had exhausted into critical resistance at 114.55/92- a region where the 2018 swing high and the 78.6% Fibonacci retracement of late-2016 decline converge on the median-line of the ascending pitchfork formation we’ve been tracking off the yearly low. We warned that “From a trading standpoint, the focus is on a possible correction towards uptrend support” – and we got it! USD/JPY registered a low at 112.72 before rebounding sharply off the 25% parallel with the subsequent rally once again taking price into critical technical resistance- the battle lines drawn.

A topside breach / weekly close above this threshold is needed for the immediate long-bias to remain viable with such a scenario exposing the August 2015 swing lows at 116.08 backed by the 2017 high-week close at 116.90. Subsequent resistance objective eyed at the December 2016 high-week close / high at 117.90 & 118.66 respectively. Monthly open support rests at 114.05 backed by the 25% parallel (currently ~113.20s) with broader bullish invalidation steady at the 111.60/98 confluence zone.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line:The USD/JPY breakout is pressing into confluent uptrend resistance here and the focus is on possible inflection off this threshold. From a trading standpoint, a good to reduce long-exposure / raise protective stops – losses should be limited to the 25% parallel IF price is indeed heading higher on this stretch. Note that a breakout here would likely fuel another accelerated rally – stay nimble. I’ll publish an updated Japanese Yen Price Outlook once we get further clarity on the near-term USD/JPY technical trade levels.

Japanese Yen Trader Sentiment – USD/JPY Price Chart

Japanese Yen Trader Sentiment - USD/JPY Price Chart - US Dollar vs Yen Retail Positioning - Technical Outlook
  • A summary of IG Client Sentiment shows traders are net-short USD/JPY - the ratio stands at -2.21 (31.13% of traders are long) – typically bullish reading
  • Long positions are1.72% higher than yesterday and 9.79% lower from last week
  • Short positions are3.12% lower than yesterday and 14.78% 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.

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US / Japan Economic Calendar

USD/JPY Economic Calendar - Japan US Key Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Previous Weekly Technical Charts

--- Written by Michael Boutros, Technical Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

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

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