USD/JPY Technical Outlook: Price Rally Approaching Critical Resistance

The Japanese Yen has depressed (USD/JPY up) scarcely 3% from a May extremes with a cost now coming an area of technical significance. These are a updated intraday targets invalidations levels that matter on a USD/JPY cost charts.Review this week’s Strategy Webinar for an in-depth relapse of this setup and more.

USD/JPY Daily Price Chart

USD/JPY Daily Price Chart

Technical Outlook: In final week’s Technical Perspective on a Japanese Yen, we remarkable that USD/JPY had continued to connect only next a, “key insurgency operation during 110.88-111.65– a segment tangible by a 61.8% retracement of a Nov sell-off and a 50% of a broader decrease off a late-2016 high.” Note that simple slope resistance fluctuating off a 2017 high and a 50-line of a user ascending pitchfork formation intersect on this top end and serve prominence a technical stress of this level.

Initial daily support now rests during 110.70 with bullish cancellation now lifted to a 200- day relocating normal / 50-line around ~110. A crack / tighten above 111.62 would be indispensable to keep a long-bias viable with such a unfolding targeting a 2018 open during 112.65 corroborated by a 61.38% retracement during 113.27.

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USD/JPY 240min Price Chart

USD/JPY 240min Price Chart

Notes: closer demeanour during USD/JPY cost movement shows a span coming a May highs during 111.40 with intraday RSI low in overbought territory. The evident hazard stays aloft though we’re on a surveillance for a greeting on a pierce into connection insurgency during 111.62 – area of seductiveness for probable depletion / brief entries.

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Bottom line: We’re looking for depletion on a widen into this pivotal insurgency section in a days ahead. Look for a mangle next a weekly opening-range lows to get this going with a dump sub-110.04 indispensable to advise a some-more poignant high is in place.

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USD/JPY Trader Positioning

USD/JPY Trader Sentiment

  • A outline of IG Client Sentiment shows traders are net-short a USD/JPY- a ratio stands during +-1.33 (42.9% of traders are long) – bullish reading
  • Traders have remained net-short given June 28th; cost has changed 0.9% aloft given then
  • Long positions are 5.5% reduce than yesterday and 3.0% reduce from final week
  • Short positions are11.9% aloft than yesterday and 10.4% aloft from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests USD/JPY prices might continue to rise. Traders are serve net-short than yesterday and final week, and a multiple of stream positioning and new changes gives us a stronger USD/JPY-bullish contrarian trade bias from a view standpoint.

See how shifts in USD/JPY retail positioning are impacting trend- Learn some-more about sentiment!

Relevant USD/JPY Data Releases

USD/JPY Economic Calendar

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Other Setups in Play

– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or hit him during mboutros@dailyfx.com

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