Japanese Yen Price Action Setups Across USD/JPY, GBP/JPY, EUR/JPY, CAD/JPY

Overview

The Japanese yen has shown significant strength recently, particularly against major currencies such as the US dollar, British pound, euro, and Canadian dollar. The USD/JPY pair experienced a notable -3% decline, marking its worst week since November, primarily due to a resurgence in yen strength rather than a weakness in the US dollar. This trend is supported by bullish technical signals across various currency pairs involving the yen.

Market Dynamics

Despite the yen's strength, Japan's bond yields have stabilized, which may limit further bullish momentum for the yen in the short term. However, the overall sentiment remains bullish for the yen, especially as asset managers maintain net-long positions in futures and equity indices show potential for deeper pullbacks.

Technical Analysis of Key Currency Pairs

USD/JPY

The USD/JPY pair has shown signs of a potential retracement after a sharp selloff. A three-day bullish reversal pattern has formed, suggesting a possible move towards the 154 handle or the December low at 154.34. However, a sustained break below the March high would indicate a deeper selloff, with targets around 150 and 147.50.

EUR/JPY, GBP/JPY, and CAD/JPY

All three pairs have seen declines of over 3% from their cycle highs, indicating a strong yen. They are currently trading between their 50-day and 100-day EMAs, with bearish momentum expected to continue after minor retracements.

GBP/JPY

GBP/JPY has struggled to maintain momentum above 215, with current support around 207.6. A failure to break above 210 could lead to further declines.

EUR/JPY

EUR/JPY has found support near 181.06 but risks further downside as previous swing lows have been breached. Bears may target a sustained break below the 180 handle.

CAD/JPY

CAD/JPY has held above its prior swing low, but the overall bias remains bearish unless it can reclaim higher resistance levels.