Japanese Yen Price Outlook: USD/JPY, AUD/JPY, CAD/JPY

JPY price action has largely traded on its back foot for the last few months. Weakness across the Japanese Yen has broadly stemmed from its posturing as a top safe-haven currency. Demand for safe-haven currencies like the Yen has dissipated with market sentiment and trader risk appetite flourishing. The Yen has strengthened considerably against its US Dollar peer, however, as spot USD/JPY edges toward its lowest monthly close since October 2016.

  1. USD/JPY PRICE CHART: DAILY TIME FRAME (26 JUN TO 30 DEC 2020)

USDJPY Price Chart Yen Technical Forecast

USD/JPY price action could continue to face selling pressure headed into the new year as US Dollar bears strongarm the major currency pair lower. The Dollar-Yen might look toward the 102.50-price level, which is underpinned by the March swing lows, as a potential area of technical support. The bottom Bollinger Band and month-to-date lows around the 103.00-handle seems to have provided a bit of buoyancy so far, but the negatively-sloped 20-day simple moving average looks to be a more dominant headwind. A bearish crossover on the MACD indicator also suggests that downward momentum is accelerating.

AUD/JPY PRICE CHART: DAILY TIME FRAME (04 SEP TO 30 DEC 2020)

AUDJPY Price Chart Yen Technical Forecast

AUD/JPY price action has advanced steadily since the early November swing low. The Aussie-Yen trades over 600-pips higher since then and is on pace to close 2020 at a year-to-date high. Although the relative strength index suggests AUD/JPY has entered ‘overbought’ territory, the bullish trend appears firmly intact. If volatility continues to bleed lower and sentiment stays upbeat, spot AUD/JPY could extend toward the 80.500-price level underscored by the April 2019 swing high. On the other hand, a return of risk aversion, which would likely correspond with a pullback across major stock indices, the Japanese Yen could catch a safe-haven bid and steer AUD/JPY lower. This scenario could bring the 50-day simple moving average into focus as a potential area of technical support.

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