- USD/JPY dips towards 134.00 as buyers book profits ahead of Friday’s US CPI.
- Sentiment remains negative as US equities record losses.
- USD/JPY Price Forecast: The major is upward biased, but negative divergence in the weekly/daily chart might open the door for a pullback towards 131.00.
The USD/JPY retreats from 2-decade highs around 134.55 but is trimming substantial losses, and albeit losing 0.09%, is preparing for a test of the 135.00 figure. At the time of writing, the USD/JPY is trading at 134.20, a signal that traders are booking profits ahead of the release of US inflation data on Friday.
USD/JPY falls as bulls take profits
A dismal market mood keeps global equities pressured. In the FX space, the safe-haven currencies are rising. The USD/JPY is dropping, as above-mentioned by profit-taking and the closeness of the 135.00 mark, seen by some Japanese officials as a line of the sand to intervene in the FX markets.
In the meantime, the US Dollar remains bid, gaining 0.59% as portrayed by the US Dollar Index. The DXY is sitting at 103.151, underpinned by the US 10-year benchmark note rate parked around 3.033%.
Elsewhere, the USD/JPY topped around 134.50 and edged lower, breaking demand zones on its way south, like the daily pivot point at 133.74 and stopped shy of the S1 pivot point, at 133.01.
USD/JPY Price Forecast: Technical outlook
The USD/JPY monthly chart depicts the pair as upward biased, but RSI readings at 83 suggest the major might be about to peak soon. However, a rally towards 2002’s yearly high at 135.16 is on the cards. If the USD/JPY clears that hurdle, then a move towards the August 1998 high at 147.67 is on the cards.
The USD/JPY weekly chart illustrates the formation of a negative divergence between price action and the Relative Strength Index (RSI). If that scenario plays out, the USD/JPY could fall towards 131.34.
The USD/JPY daily chart portrays the pair as in a strong uptrend, recording gains of more than 700 pips in the last ten trading days. Nevertheless, the USD/JPY lost 0.19% in one of those ten days and at the time of writing, is down by 0.04%. Also, a negative divergence between price action and the RSI formed and might open the door for a pullback.
That said, the USD/JPY’s first support would be the June 7 low at 132.54. A breach of the latter would expose the June 6 low at 131.84, followed by the May 9 swing high-turned-support at 131.34.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Gold hovers around all-time highs near $3,250
Gold is holding steady near the $3,250 mark, fuelled by robust safe-haven demand, trade war concerns, and a softer-than-expected US inflation gauge. The US Dollar keeps trading with heavy losses around three-year lows.
EUR/USD retreats towards 1.1300 as Wall Street shrugs off trade war headlines
The EUR/USD pair retreated further from its recent multi-month peak at 1.1473 and trades around the 1.1300 mark. Wall Street manages to advance ahead of the weekly close, despite escalating tensions between Washington and Beijing and mounting fears of a US recession. Profit-taking ahead of the close also weighs on the pair.
GBP/USD trims gains, recedes to the 1.3050 zone
GBP/USD now gives away part of the earlier advance to fresh highs near 1.3150. Meanwhile, the US Dollar remains offered amid escalating China-US trade tensions, recession fears in the US, and softer-than-expected US Producer Price data.
Bitcoin, Ethereum, Dogecoin and Cardano stabilze – Why crypto is in limbo
Bitcoin, Ethereum, Dogecoin and Cardano stabilize on Friday as crypto market capitalization steadies around $2.69 trillion. Crypto traders are recovering from the swing in token prices and the Monday bloodbath.
Is a recession looming?
Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.