Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Yen Technical Outlook: USD/JPY Plunge Threatens Larger Correction

Yen Technical Outlook: USD/JPY Plunge Threatens Larger Correction

Michael Boutros,
What's on this page

Japanese Yen Technical Price Outlook: USD/JPY Near-term Trade Levels

  • Japanese Yen technical trade levels update – 240min Chart
  • USD/JPY working on third weekly decline- technical support in view
  • Support 125.86/95, 125.57, 124.51 (critical)- Resistance at 127.89, 128.08, 130.26 (key)

The US Dollar is on the defensive for a third week Japanese Yen with USD/JPY plunging more than 3.7% from multi-year highs. The sell-off is now approaching initial support hurdles and we’re looking for possible price inflection just lower. These are the updated targets and invalidation levels that on the USD/JPY near-term chart.Review my latest Weekly Strategy Webinar for an in-depth breakdown of thisYen technical setup and much more!

Japanese Yen Price Chart – USD/JPY 240min

Japanese Yen Price Chart - USD/JPY 240min - Dollar vs Yen Trade Outlook - USDJPY Near-term Technical Forecast

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

Notes: After a stunning nine-week rally of more than 14%, USD/JPY is now attempting to mark a third consecutive weekly decline with price off more than 3.8% from the highs. We’ve been tracking this descending pitchfork formation extending off the April / May highs with price continuing to trade between the inner parallels for the past four sessions.

A break below the median-line keeps the focus on key support just lower at the 2015 high / 100% extension at 125.85/95 and the 2015 high-day close at 125.57 – both regions of interest for possible price inflection IF reached. More significant support eyed at the 38.2% Fibonacci retracement of the yearly range at 124.51. Initial resistance now at the weekly open / weekly high at 127.89-128.09 with a breach / daily close above the upper parallel needed to suggest a more significant low is in place. The yearly high-day close comes in at 130.26 in the event of a breakout.

JPY Forecast
JPY Forecast
Recommended by Michael Boutros
Download our Japanese Yen Trading Forecast!
Get My Guide

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

Bottom line:The plunge off multi-year highs takes USD/JPY into the first major support hurdles. From a trading standpoint, look to reduce portions of short-exposure / lower protective stops on a stretch towards 126- rallies should be capped by the weekly range highs at 128.09 IF a larger correction is indeed underway here. Stay nimble into the close of the extended-holiday weekend with US core PCE on tap Friday.

Japanese Yen Trader Sentiment – USD/JPY Price Chart

Japanese Yen Trader Sentiment - USD/JPY Price Chart - Dollar vs Yen Retail Positioning - USDJPY Near-term Trade Outlook
  • A summary of IG Client Sentiment shows traders are net-short USD/JPY - the ratio stands at -2.50 (28.61% of traders are long) – typically bullish reading
  • Long positions are2.54% higher than yesterday and 9.17% lower from last week
  • Short positions are9.15% lower than yesterday and 12.90% lower 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. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current USD/JPY price trend may soon reverse lower despite the fact traders remain net-short.
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -6% -1% -3%
Weekly 7% -7% -3%
Learn how shifts in USD/JPY retail positioning impact trend
Get My Guide


US / Japan Economic Calendar

US / Japan Economic Calendar - USD/JPY Key Data Releases - Weekly Event Risk

Economic Calendar - latest economic developments and upcoming event risk.

Active Technical Setups

Forex for Beginners
Forex for Beginners
Recommended by Michael Boutros
New to Forex Trading? Get started with this Beginners Guide
Get My Guide

--- 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.