USD/JPY, EUR/JPY, GBP/JPY: Japanese Yen Technical Analysis

Japanese Yen Talking Points:

• JPY was volatile after the weekly open given political dynamics in Japan. This article is more concerned with price action in JPY pairs.
• While the USD/JPY recovery has continued, there’s been cleaner breakout setups in GBP/JPY and EUR/JPY. I looked at GBP/JPY in the weekly forecast the week before last and I looked at EUR/JPY this weekend, with both breakouts continuing-higher.
• I’ll be looking into all three markets in tomorrow’s webinar, which is free to attend. Click here for registration information.

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Japanese Yen weakness continues despite some early-week volatility on the back of Japanese politics. The major pair of USD/JPY put in a substantial breakout last week to clear a big spot on the chart at 151.95, after which price pulled back to find support at the 200-day moving average as the bullish trend continued.

But as the US Dollar has started to stall in its bullish trend, there may be cleaner setups elsewhere if searching for a continued run of Yen-weakness. I’ve looked at each of GBP/JPY and EUR/JPY in weekend forecasts over the past two weeks, and as of this writing, both have backdrops of bullish continuation potential.

In USD/JPY, the pair has now retraced 61.8% of the sell-off that appeared in July. Resistance has played at the 153.40 price that I looked at in this weekend’s US Dollar Price Action Setups article and bulls haven’t yet shown signs of relenting. Key support remains at that 151.95 level, which set the highs in the pair during Q4 each of the past two years.

USDJPY AD

USD/JPY Daily Price Chart

EUR/JPY

Coming into last week there was a clean ascending triangle on the daily chart of EUR/JPY. Resistance had held around 163.50, which was a confluent spot as this was both the 50% retracement of the July 2023-2024 major move, and it was also the late-September swing high.

But each reaction to that resistance carried less and less weight, leading to the build of the bullish trendline making up the support side of the formation, and when bulls went to press resistance again last Wednesday, sellers suddenly disappeared as price jumped right up to the 200-day moving average.

Even the pullback from that remained bullish, with two days of support showing at prior resistance of 163.90 and that led to another move of continuation to start this week.

So far, buyers haven’t been able to punch through 166.00, which I looked at in the article earlier this morning. But this remains a bullish setup and the next spot of resistance on my chart is just overhead, plotted at 166.25. That’s the 61.8% retracement of the same major move from which the prior resistance at 163.50 originated.

EUR/JPY Daily Price Chart

EUR/JPY Shorter-Term

Chasing an already developed move can always be a challenge and given prior reaction to 165.00, there’s an ideal spot to look for bullish defense in the event of pullbacks, whether that happens before or after a test of 166.25.

That already played out to a degree in early-week trade, so we can also incorporate a prior swing level at 165.35 for possible higher-low support in the event of pullback scenarios.

EUR/JPY Four-Hour Price Chart

GBP/JPY

When I looked at the ascending triangle in GBP/JPY two weekly forecasts ago, the pair had spent three weeks holding resistance at 195.66. That’s the 23.6% retracement of the 2023-2024 major move and it’s a price that bears did not give up easily. Like EUR/JPY above, that formation built as resistance carried a diminishing marginal impact, leading to the bullish trendline helping to make up support.

Early trade last week saw the development of a grinding move as buyers started to chew through that resistance, but it was the Wednesday breakout, when JPY was weak against USD, Euro and GBP that the pair finally flung up to fresh highs.

At that point, another Fibonacci level came into the equation to hold the daily high for the final three days of last week at 197.42.

GBP/JPY Daily Price Chart

GBP/JPY Strategy

Given the fast run stalling just below the 200.00 psychological level, there’s a logical area to look for resistance to play. There’s already been a fast reaction to support at prior resistance from around the 197.79 level and given the adherence of resistance to that zone, that remains the spot that buyers need to hold to keep the door open for bullish continuation scenarios.

Ideally for bullish setups to remain attractive, any corresponding pullbacks would hold above the swing-low at prior resistance of 197.79. That sets up the 198.08 and 198.00 levels for higher-low support.

If price does dig deeper, however, there’s continued scope for pullback down to the Fibonacci level of 197.42, which had set the highs last Thursday while helping to hold daily highs from Wednesday into last week’s close.

GBP/JPY Four-Hour Price Chart

--- written by James Stanley, Senior Strategist