USD/JPY Forecast January 27, 2017, Technical Analysis

The US dollar rallied against the Japanese yen during the day on Thursday, pressing against the vital 115 handle. This is an area that has been resistive in the past, as well as supportive, so I believe that there will be a significant amount of interest in the market near that level. I also recognize that the shooting star that is placed from a couple of sessions ago would be a significant marker as to what happens next. If we can break above the top of that shooting star, the market should continue to go much higher. I believe that a break above that shooting star senses market looking for the recent high at the 118.50 level, an area that of course should be resistive. If we can break above there, the market then reaches towards the 120 handle beyond.
Alternately, if we find and exhaustive candle at the 115-level forming again, I think that the sellers will try to push this market back down to the 113 region. Longer-term, I believe that the US dollar will continue to strengthen that against the Japanese yen though, because of the Federal Reserve and its future interest rate hikes. Because of this, the US dollar will strengthen overall, and of course will do so fever only against the Japanese yen which of course is going to suffer at the hands of a very soft central bank policy. In the Forex markets, it appears that the Japanese yen will continue to suffer, and this pair of course will be any different.
Currently, I believe that this market has changed trends overall, and should continue to show strength from time to time. The candle on Thursday of course shows quite a bit of bullishness but as I said before, the 115 level can be thought of as a massive barrier. As far as selling is concerned, I have no interest in doing so for any real length of time, and will error on the side of caution when it comes to trading this market, approaching a “buy only” attitude.