Japanese Yen Technical Outlook: USD/JPY, EUR/JPY, GBP/JPY
Original article by Manish Jaradi | Source: Forex.com
The Japanese yen (JPY) has continued to weaken steadily against major currencies such as the US dollar (USD), euro (EUR), and British pound (GBP). This persistent depreciation reflects both fundamental economic divergences between Japan and other developed economies and technical patterns indicating further downside pressure on the yen. Below is a detailed technical analysis of USD/JPY, EUR/JPY, and GBP/JPY as of July 17, 2025, highlighting key levels, trends, and potential scenarios based on price action.
Key Themes Driving the Yen Weakness
– Monetary Policy Divergence: The Bank of Japan (BoJ) maintains an accommodative stance while central banks in the US and Europe have either paused rate hikes or continue to keep rates elevated to contain inflation.
– Yield Differentials: Persistently low interest rates in Japan, contrasted with higher yields in the US, UK, and EU, make the yen less attractive and fuel carry trades.
– Market Sentiment: The global risk appetite remains firm, reducing demand for the traditionally safe-haven yen.
– Technical Momentum: The yen’s depreciation has been reinforced by clean breakouts in key currency pairs, suggesting that near-term momentum could persist.
USD/JPY – Higher Highs Confirm Uptrend
The USD/JPY pair continues to show strong bullish momentum, driven by robust US economic data and expectations that the Federal Reserve will keep rates higher for longer.
Current Technical Setup
– The pair recently broke above the critical resistance zone of 157.00–158.00, confirming a continuation of its long-term uptrend.
– There has been a decisive breach of multiple resistance points, suggesting reduced selling interest and stronger upside conviction.
– The next major resistance lies near 161.00–161.50, the highs from 1990. A clean break of this area could open doors toward 163.00 in the medium term.
Support and Resistance Levels
– Immediate support: 157.00–158.00 (former resistance, now support)
– Key resistance: 161.00 – 161.50 (historical highs from 1990)
– Additional target levels: 163.00 – 165.00 possible if current momentum is sustained
Momentum Indicators
– RSI (Relative Strength Index) remains above 70 on the daily chart, indicating strong bullish momentum but also warning of near-term overbought conditions.
– Moving averages (20-day and 50-day) continue to slope upward and offer dynamic support.
Risk Considerations
– Potential intervention by Japanese authorities to curb yen weakness could trigger short-term volatility.
– A weaker-than-expected showing in upcoming US data could weigh on rate expectations and limit further USD gains.
Outlook Summary
– Bias: Bullish while above 157.00
– Near-term target: 161.50
– Medium-term projection: 163.00 – 165.00
– Watch for signs of intervention or sharp pullbacks for tactical trading setups
EUR/JPY – Firmly Bullish Despite Overbought Conditions
EUR/JPY remains in a strong uptrend, having recently pushed through key resistance levels and holding gains well above prior consolidation ranges.
Current Technical Structure
– The pair broke through the resistance range of 170.50–171.50 with ease, supported by a stable eurozone economic outlook and ECB’s relatively hawkish stance compared to the BoJ.
– There is no immediate resistance until the 175.00 area, which reflects a measured move and round number psychological level.
Support and Resistance Levels
– Immediate support: 171.50 (recent breakout level)
– Next resistance: 175.00 (psychological barrier)
– Additional upside levels: 177.00–178.50 if bullish momentum accelerates
Momentum and Trend Indicators
– RSI is in the overbought territory but
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