USD/JPY Forecast June 15, 2017, Technical Analysis

The US dollar fell precipitously during the session on Wednesday, as we guide very poor numbers coming out the United States. However, there is an interest rate decision coming out later in the day, and the wording of the statement will be very important. This is essentially the market betting that the Federal Reserve will not be able to continue raising rates later this year, which of course works against the value of the US dollar. I believe that ultimately, we could be in store for a massive move higher if it does in fact look like they are ready to continue to raise interest rates. However, if they sound a bit more dovish, it’s very likely that this market will continue to fall, looking for support near the 108 level which is the 61.8% Fibonacci retracement level of the larger move.
This will be Ground Zero
This will be Ground Zero for the interest rate announcement, as this is one of the most sensitive currency pairs to the US interest rate situation. Of special interest will be the 10-year note, as this market seems to be highly sensitive to the interest rate differential between the two markets. I believe that the market is going to be very difficult and dangerous to be involved in, but I would suspect that there’s probably more of opportunity for an upside surprise than down after this move. After all, the market has already started leaning to the downside. Either way, I think you could be looking at trouble just waiting to happen as traders are essentially gambling on what the next move will be. By trying to figure that out ahead of time and within hours of a major announcement, a lot of people are going to be very upset by the end of the day.