USD/JPY Price forecast for the week of November 6, 2017, Technical Analysis

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The USD/JPY pair fell during the week, reaching down to the 113 handle. We bounce from there though, and saw the market reach towards the 114.50 level above. This is the beginning of massive resistance, extending to the 115 handle, which I believe is a major level on the chart. As we have broken above … Continue reading USD/JPY Price forecast for the week of November 6, 2017, Technical Analysis · FX Empire

Christopher Lewis

Updated Fri, Nov 3, 2017, 11:20 PM

The USD/JPY pair fell during the week, reaching down to the 113 handle. We bounce from there though, and saw the market reach towards the 114.50 level above. This is the beginning of massive resistance, extending to the 115 handle, which I believe is a major level on the chart. As we have broken above the downtrend line, looks likely that the market will continue to go towards the 118 handle, perhaps even the 120 level. Short-term pullbacks continue to give us an opportunity to take advantage of value, because quite frankly I think that the US dollar will continue to strengthen.

We did struggle a bit, looking likely to show that the move higher will be a bit difficult. The jobs number disappointing on Friday doesn’t help the situation, but I think given enough time the US dollar buyers will continue to push to the upside. I think that the 113 level should now offer massive support, and I believe that the longer-term trend to the upside should continue, with massive volatility. Once we break above there, the market will then struggle at the 120 handle, but I think longer-term we are starting to see the market form a bit of a basing pattern. If you look at the bottom of the downtrend in the late 90s, you can see that the trend reversal was very similar to the pattern that we have for me now.

If the Federal Reserve does in fact raise interest rates several times over the next year, this pair should continue to go much higher as the interest rate differential between the 10-year notes of both countries will continue to favor the US quite drastically. That is my longer-term thesis, but I recognize that jumping in with a full position could be a good way to lose a lot of money in the short term. Only add to your position once we break above the 115 handle.