JPY Q2 2021 Technical Forecast

The technical outlook for the haven-associated Japanese Yen remains overtly bearish, after the funding currency toppled over 5.5% on average
against its major counterparts in the first quarter of 2021. A
continuation of this downside move seems in the cards through the coming
months, as cycle analysis suggests a cyclical downturn is afoot for
JPY.To get more news about WikiFX, you can visit wikifx.com official website.
The chart above highlights the cyclical pattern displayed by the
Japanese Yen over the past 37 years, with the currency largely adhering
to what appears to be an 8-and-a-half year rotation. JPY set significant
bottoms against its major counterparts in late 1998, early 2007 and
late 2015.

After bottoming out, the haven-associated currency then seems to
outperform early in the cycle, with key highs posted roughly two years
after the 1998 and 2007 lows.

Although the Yen soared to its initial cyclical high just 13 months
after the start of the period, the development of price over the last
five years looks strikingly similar to the previous bullish cycle.

With that in mind, the convincing break below uptrend support
extending from the December 2014 low – combined with the RSI snapping
its 73-month uptrend and sliding to its lowest levels in six years – may
foreshadow extended losses for JPY in the coming months.

Cycle analysis suggests that the currency could fall an additional 25%
from current levels before bottoming out in early 2024.The USD/JPY
exchange rate appears to be gearing up for an extended move higher, as
price surges through the 61.8% Fibonacci retracement of the March 2020
to January 2021 downtrend, and careens towards confluent resistance at
the sentiment-defining 200-MA (108.97) and Symmetrical Triangle
downtrend.

With the RSI eyeing a push into overbought conditions for the first
time since 2017, and the MACD registering its highest degree of positive
divergence in four years, the path of least resistance seems skewed to
the topside.

A weekly close above psychological resistance at 110.00 is required to
validate a bullish break of Symmetrical Triangle consolidation and
would probably open the door for the exchange rate to accelerate towards
the 2019 high (112.40).

Hurdling that could pave the way for USD/JPY to begin probing the
114.00 handle. However, if triangle resistance remains intact, and
prices slide back below the 61.8% Fibonacci (108.23), a pullback towards
the trend-defining 55-EMA (106.26) could be on the cards.