Japanese Yen Price Outlook: USD/JPY Breakout Levels- Resistance Ahead

The Japanese Yen is down more than 0.65% against the US Dollar this week with USD/JPY rallying back towards a critical resistance zone we’ve been tracking for months now. 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 gold price setup and more.

Forex for Beginners

Forex for Beginners

Recommended by Michael Boutros

New to Forex Trading? Get started with this Beginners Guide

Get My Guide

Japanese Yen Price Chart – USD/JPY Daily

Japanese Yen Price Chart - USD/JPY Daily - Trade Outlook - Technical Forecast

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

Notes: In my latest Japanese Yen Weekly Price Outlook we noted that USD/JPY was, “once again testing critical yearly open resistance at 109.68 and we’re looking for a reaction.” Price registered a high at 109.72 before reversing sharply lower with the decline rebounding off Fibonacci support at the 23.6% retracement of the August advance at 108.48. Price is poised to mark an outside daily-reversal candle off this threshold today with USD/JPY again targeting the 61.8% retracement at 109.35. Note that daily RSI has continued to hold above the 40-threshold since the August lows and keeps the broader momentum profile on the side of the bulls for now.

Japanese Yen Price Chart – USD/JPY 120min

Japanese Yen Price Chart - USD/JPY 120min - Trade Outlook - Technical Forecast

Notes: A closer look at Japanese Yen price action shows USD/JPY trading within the confines an ascending pitchfork formation extending off the monthly lows. A topside breach of the weekly opening-range today keeps the focus on topside resistance targets at 109.23 backed by broader downtrend slope resistance near ~109.30s – look for a reaction / possible exhaustion there IF reached.

Initial support now rests at the median-line / 109-handle with near-term bullish invalidation now raised to 108.80. A topside breach from here would likely see an accelerated rally with such a scenario exposing the upper parallel / monthly open resistance at 109.52 and the yearly open at 109.68.

Why does the average trader lose? Avoid these Mistakes in your trading

Bottom line: A breach of the opening-range keeps the focus higher in USD/JPY into the close of the week, but the recovery is now approaching resistance hurdles that could interrupt the rally. From a trading standpoint, look to reduce long-exposure / raise protective stops on a move towards the upper parallel- look for a larger reaction there (high exhaustion risk). IF this rally is a larger turn in price, pullbacks should be limited to the 25% parallel / 108.80. Ultimately a break below weekly open support at 108.60 would be needed to mark resumption of the broader downtrend. Review my latest Japanese Yen Price Weekly Outlook for a closer look at the longer-term USD/JPY technical trading levels.

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

Japanese Yen Trader Sentiment – USD/JPY Price Chart

Japanese Yen Trader Sentiment - USD/JPY Price Chart - Trader Sentiment - Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-long USD/JPY – the ratio stands at +1.43 (58.71% of traders are long) – bearish reading
  • Long positions are0.49% lower than yesterday and 16.80% higher from last week
  • Short positions are 0.99% higher than yesterday and 4.05% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USD/JPY prices may continue to fall. Traders are less net-long than yesterday but more net-long from last week and the combination of current positioning and recent changes gives us a further mixed USD/JPY trading bias from a sentiment standpoint.


Data provided by

of clients are net long.

of clients are net short.

Change in Longs Shorts OI
Daily -24% -9% -18%
Weekly -9% -17% -13%

Active Trade Setups

– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

Articles You May Like

Forex Trading | TURN $40 INTO $300 😱 | Forex Trading For Beginners 2020
FOREX $85 Per Hour Trading | Forex Trading 2020
NZD/USD Rate Outlook Undermined by Bearish RSI Behavior
How I Make $1k/Day Scalping Gold With Divergence
How To Start Forex Trading in 2020

Leave a Reply

Your email address will not be published. Required fields are marked *