Jump to content

Japanese Yen Technical Analysis: USD/JPY, EUR/JPY. Will Yen Weakness Resume?

Recommended Posts


  • USD/JPY has gone into consolidation mode after making a new high last week
  • Bollinger Bands and a candlestick are not enough for USD/JPY to go lower so far
  • The Euro has lost ground to the Yen. Will EUR/JPY make a new 9-month low?


Last week, USD/JPY made a new high when it took out the peak of November 2017. It has since consolidated and traded within the 112.727 – 114.971 range for over a month. These levels might now provide support and resistance respectively.

The Bearish Engulfing candlestick made on the day of the multi-year high has seen USD/JPY depreciate to 113.589, which coincided with the 34-day simple moving average (SMA). This may now be a support level.

There was another potential reversal signal from last week. The price closed above the upper band of the 21-day simple moving average (SMA) based Bollinger Band. The following day it closed back inside the band. This has seen some bearishness unfold but so far it has lacked follow through.

Conversely, a bullish triple moving average (TMA) formation remains intact, despite the recent weakness in price.

A TMA requires the price to be above the short term simple moving average (SMA), the latter to be above the medium term SMA and the medium term SMA to be above the long term SMA. All SMAs also need to have a positive gradient.

Looking at where the price is and the arrangement of the 10, 55 and 200-day SMAs, all of these conditions have been met. It should be noted though that past performance is not indicative of future results.

Besides the recent high of 114.971, resistance could be at the pivot points of 114.450 and 114.735.

On the downside, possible support may lie at the previous lows of 113.589 and 112.727, the pivot points at 112.079 and 110.802 or the lows from August and September of 109.113 and 108.723.


Chart created in TradingView

How to Trade USD/JPY

EUR/JPY – Technical Analysis

Going into the end of last week, EUR/JPY saw significant weakening that threatened the previous low 127.934. It made a low of 127.981 and these levels might provide support if tested.

On that run down, it broke outside the 21-day based Bollinger Band, even though the width of the bands expanded with increasing volatility. It moved outside and then inside the lower band three times which might indicate market uncertainty.

Resistance could be offered at the recent high of 130.083 or at the pivot point of 131.479. Should a sustainable rally get underway, resistance may also be found at the previous highs of 132.563, 132.919, 133.481 and the June peak of 134.124. There is also a descending trend line that currently intersects at 131.60.



Written by Daniel McCarthy, Strategist for DailyFX.com. 22nd November 2021

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 28/03/23 00:58
  • Posts

    • Micron Technology is poised to post a loss of 66 cents per share on another drop in revenue. Three months ago, sales fell 41% to just over $4 billion.  Jeremy Naylor | Analyst, London | Publication date: Tuesday 28 March 2023  The chip industry is still suffering from distortion originating from the Covid-19 pandemic. Orders soared during 2020 and 2021 to supply a technology boom, pushing Micron and other chip makers to produce more. Now, in the context of fears of a recession, they are left with excess inventories and are being forced to wind down their capital investment budget.   Micron earnings Tonight after the close of Wall Street we've got an all-session stock reporting earnings, which could be interesting. It is the chip company, Micron Technology. It's poised to post a loss of $0.66 per share. Revenue is expected to continue declining to $3.75 billion. Three months ago, sales fell 41%, just over $4 billion. So it's on this downward trajectory. As I say it is an all-session stock on the IG platform. You'll be able to take a tilt at this in the markets after the close. It will open at 9:00 this morning, UK time at 60.08, that's $60.08 a share. Share price chart Look at the pressure the stock has been under. The semiconductor industry generally still suffering from distortion originating from the Covid-19 pandemic. Orders soaring during 2020 and 2021 to supply a technology boom, pushing Micron and other chip makers to produce more. Now, in the context of fears of a recession, they are left with excess inventories and are forced to wind down their capital investment budget. Micron Technologies reporting after the bell this evening on this Tuesday, 28th of March.
    • Investor Spotlight: banks buckle, energy fades, tech returns We examine what’s driving the outlook for US fundamentals, and hone in on one stock from each of the financial, energy and tech sectors.            
    • European banking confidence improves significantly as German IFO rises.   Source: Bloomberg   Indices DAX Technical analysis FTSE 100 Financial services Pullback (differential geometry)  Tony Sycamore | Market Analyst, Australia | Publication date: Tuesday 28 March 2023  Reports that US officials will expand lending facilities to banks and confirmation of the acquisition of SVB's loans and deposits by First Citizens bank have helped restore a sense of calm to European banks and equity indices overnight. Also providing support, the release of robust macro data as Germany's IFO business climate index rose to 93.3 from 91.1 in February, the highest print since the Russian invasion of Ukraine (chart below). The bulk of the gains in the headline IFO index was driven by firmer expectations for the forward-looking Business expectations, which rose to 91.2 from 88.4 in February. The current conditions index also rose to 95.4 from 93.9 in February. The strong IFO number confirms the upside surprises in last week's flash PMI data. German businesses remain optimistic despite recent banking stress, which is expected to weigh in future months via tighter lending. IFO chart   Source: Trading Economics Given central bank's stubborn focus on inflation, there will be keen interest in European inflation data later this week, which is expected to fall following sharp declines in wholesale energy prices. The flash estimate of Euro Area Harmonised inflation (Friday) is expected to print at 7.1% in March, down from 8.5% in February and well below its peak of 10.6% in October German Headline inflation (Thursday) is expected to fall to 7.3% in March from 8.7% in February. DAX technical analysis The view remains that the Dax completed a five-wave advance (Elliott Wave) from the October 11,829 low to the recent 15720 high and is currently tracing out a corrective pullback. The bounce from the 14617 low is viewed as Wave B or the second wave of the correction, which is missing another leg lower into the 14,400/14,200 support band. However, if the Dax first breaks above trendline resistance and the recent highs 15,700/20 area, it would indicate the correction is complete at the 14,617 low, and the uptrend has resumed. DAX daily chart   Source: TradingView FTSE technical analysis The break below the band of horizontal support 7700/7650 in Mid-March confirms that a medium-term high is in place at the February 8047 high and that the FTSE is currently tracing out a corrective pullback. The bounce from the 7206 low is viewed as Wave B or the second wave of a three-wave correction that has room to extend back to resistance at 7700 before a deeper decline towards 7100/7000 in the weeks ahead. FTSE daily chart   Source: TradingView TradingView: the figures stated are as of March 23rd, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.
  • Create New...