USD/JPY outlook: Bears take a breather but recovery is likely to be limited

Slobodan Drvenica Windsor Brokers

USD/JPY

USDJPY edged higher on Friday morning, showing a partial recovery of Thursday’s 2.1% drop (the biggest daily drop since 1 May 2024).

Long lower shadows of daily candles of today/Thursday) point to growing bids) although recovery is unlikely to accelerate as fundamentals remains favorable for safe haven Japanese yen.

Risk aversion is on the rise and continues to prompt traders into safety, while dollar remains under strong pressure from tariffs and hopes of more dovish Fed’s stance on interest rates, although the central bank will remain extremely cautious and base its future decisions on economic conditions.

Release of US March labor data will be key economic event today, with non-farm payrolls likely slowing in March, but forecasts point to still steady conditions and more negative impact from mass firing of public sector workers to likely show in coming months.

Fresh bears look for weekly close below broken pivots at 146.95/53 (Fibo 61.8% of 139.57/158.87/Mar 11 low respectively) to validate bearish signal (the pair is on track for a weekly loss of about 2.5%) and focus next targets at 144.13 (Fibo 76.4%) violation of which to unmask140.00/139.27 (psychological/Fibo 38.2% of larger 102.59/161.95 uptrend) in extension.

Initial resistance at 146.60 (Marr 11 former low / Fibo 23.6% of 153.20/145.18 bear-leg) holds for now and should ideally cap upticks.

Res: 146.60; 147.48; 148.19; 148.90.
Sup: 145.18; 144.13; 143.65; 142.97.

Interested in USD/JPY technicals? Check out the key levels

1. R3 152.59
2. R2 150.94
3. R1 148.5
PP 146.85
1. S1 144.42
2. S2 142.76
3. S3 140.33

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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