USD/JPY Forecast May 22, 2017, Technical Analysis

The USD/JPY pair had a relatively stable session on Friday, which of course is a good thing as we broke out to the upside on Thursday. This shows that perhaps the markets are comfortable with having a little bit of risk on going into the weekend, and that is a very good sign. Stock traders have had a very strong day, and it appears that currency traders are watching with interest. The market looks as if it could go to the 112.50 level above, but we are currently in a situation where accumulation seems to be happening. If we can break above the 111.60 level, the market should find buyers to go to that level. A break above the 112.50 level is very bullish, and has the market going towards the 114 level at that point. Remember, if it looks like the Federal Reserve can raise interest rates, it’s likely that this pair will continue to go higher. I believe that some of the selling from earlier in the week were people freaking out about the possibility of less rate hikes than originally anticipated.

Jobs

Jobless claims continue to fall in the United States and that of course is one of the major mandates for the Federal Reserve, so I think it’s likely that the interest rate hikes are all but a foregone conclusion. There are some out there that call for interest rate hikes to be slowed down, or even abandon, but I don’t think the Federal Reserve is ready to do that. Quite frankly, we have had easy monetary policy for ages, and the economy in the United States is looking like it has finally paid off. With employment situations getting tight, that should continue to show strength in the US economy, which then should send interest rates higher naturally.