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USD/JPY technical outlook
USD/JPY soared in the first three months of 2024, gaining more than 7% by the end of the first quarter. Following this rally, the pair is trading just below the 2022 and 2023 highs located near the psychological 152.00 level on March 22nd, which traders should keep an eye on in the short term. It is an important resistance threshold.
As for potential scenarios, a break above 152.00 could theoretically strengthen upward momentum and give way to a rally towards 154.00. However, the bullish breakout may not last long as the Japanese government may step in to support the yen soon. Therefore, any rise above the 152.00 area could be seen as an opportunity to weaken. But absent currency intervention, the bulls could be emboldened to attack 158.50, followed by an attack on the April 1990 high of 160.00.
On the other hand, if USD/JPY is rejected from its current position and turns lower, support would appear at 146.50, near the March swing low and the 200-day simple moving average. Below this, subsequent support levels are realized at 145.00, 143.50, and 140.45, with the latter marking the 23.6% Fibonacci retracement derived from the 2021-2022 uptrend. Additional losses beyond this branch point will shift the focus to 137.00 and then 133.25.
USD/JPY weekly chart
Source: TradingView, created by Diego Colman
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|
change |
long |
shorts |
OI |
| every day | -13% | 2% | -2% |
| weekly | 33% | -9% | -2% |
EUR/JPY technical outlook
The euro/yen pair also rose sharply in the first quarter of this year, at one point exceeding the 165.00 benchmark, hitting its highest level in about 16 years. Although the bulls appear to be in control, a sustained move above 165.00 is unlikely as Japanese authorities, hoping to prevent the yen from depreciating too much, may step in to stem the bleeding.
In the unexpected case that EUR/JPY decisively breaks through 165.00 and Tokyo remains on the sidelines, buyers may boldly attack the upper bound of the long-term ascending channel at 168.75. If the euro’s momentum continues to rise unchecked, the market could set its sights on the 2008 highs near the psychological 170.00 level.
Alternatively, if the upward momentum begins to wane and the price turns lower in the coming weeks, sellers may be emboldened to challenge the trendline support and the 200-day simple moving average near 159.70. The pair could attempt to bottom in this area before rebounding, but if a breakdown materializes, the bulls could head for the hills, paving the way for a retracement towards channel support at 153.10. be. Subsequent losses from this point could be down towards 151.60 and then 148.70.
EUR/JPY weekly chart
Source: TradingView, created by Diego Colman
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Technical outlook for GBP/JPY
The British pound was no exception, with a dramatic rise against the Japanese yen in the first quarter, with GBP/JPY rising above the 190.00 handle to levels not tested since August 2015. The second quarter and the Bank of Japan’s eventual normalization of its stance could result in a lower path of least resistance in the medium term, despite a constructive technical outlook.
In case of a bearish reversal, GBP/JPY could subsequently encounter support near 189.00 and 184.75, with the 200-day simple moving average coinciding with the medium-term uptrend line at the time of writing. A subsequent loss above the aforementioned threshold could draw attention to the major swing lows of last December and October at 178.00. Both men have the potential to establish a foothold in the region. However, a break below could prompt a rally to 176.50 and then 172.25.
On the other hand, if the bulls maintain market control and push prices higher, resistance will appear at this year’s high of 193.50. Given past patterns, the bears may resist further bullish moves at this point. However, if a clean and decisive breakout occurs, a rally towards the 2015 highs around 196.00 could be on the horizon.
Pound/yen weekly chart
Source: TradingView, created by Diego Colman
