Japanese Yen Technical Outlook: USD/JPY, EUR/JPY, GBP/JPY Setups

USD/JPY, EUR/JPY, GBP/JPY Forecast: Neutral

• USD/JPY threatens 200-day MA (moving average) after strong NFP (non-farm payrolls) report restricts bearish momentum below 134.00.
• EUR/JPY rebounds off the rising trendline as the major currency pair closes the week above technical support.
• GBP/JPY drops below 50-day MA in an effort to retest major psychological barrier.

USD/JPY Extends Losses Despite Brief Rebound in Dollar Strength

USD/JPY has risen back above the 200-day MA (moving average), providing support around the 134.506 handle. After falling to a three-month low of 133.626 (last tested in mid-August), a better-than-expected NFP (non-farm payroll) report supported a slight rebound for the safe-haven currency pair.

Most Read: NFP Posts Yet Another Beat as US Job Market Proves Resilient, USD Rises

With the Federal Reserve continuing efforts to drive inflation lower by raising interest rates, the Bank of Japan (BoJ) has kept rates low to stimulate economic growth.

As market participants focus on the strong wage growth and resilient US employment data, USD/JPY jumped to 135.98 upon release. However, with another 50-basis point hike expected at the December FOMC, buying pressure eased, driving price action lower.

With support at prior resistance, the 134.00 – 135.00 zone that previously helped cap the upward move remains key for the short-term move.

USD/JPY Weekly Chart

Chart prepared by Tammy Da Costa using TradingView

For bulls to regain confidence, a hold above the 200-day MA and above the 135.00 psychological level could see the next level of resistance forming around 135.600 (the 78.6% Fibonacci level of the 2011 – 2022.

Meanwhile, for the bearish momentum to gain traction, a clear break of 134.00 and below 133.626 (current monthly low) is required. If USD strength remains suppressed, the 61.8% retracement of the 2020 – 2022 could provide additional support around 132.550 and towards the May high of 131.349.

USD/JPY Daily Chart

Chart prepared by Tammy Da Costa using TradingView

EUR/JPY Technical Analysis

Following its major currency counterpart, EUR/JPY fell to trendline support from the March low before rising back above 141.331. With this level helping hold the candle bodies of historical moves, additional selling pressure below 140.770 could open the door for a move back towards the 140.00 psychological level.

EUR/JPY Daily Chart

Chart prepared by Tammy Da Costa using TradingView

GBP/JPY Technical Analysis

As price action for the Pound Yen pair temporarily falls below the 50-day MA providing resistance at 165.662, the 164.00 spot remains as support. With the 61.8% Fibonacci retracement of the September – October holding below at 163.153, a drop below could see GBP/JPY falling to the 200-day MA at 162.830.

GBP/JPY Daily Chart

Chart prepared by Tammy Da Costa using TradingView

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707