USD/JPY Forecast September 25, 2017, Technical Analysis

The USD/JPY pair fell a bit during the session on Friday, but looks to be finding support near the 112 level. Because of this, I believe that the market will continue to find buyers as the Federal Reserve looks likely to clean up its balance sheet. This is a market that is influenced by a “risk on” factor, and of course the overall interest rate outlook for both central banks. I believe that the Federal Reserve is light years ahead of the Bank of Japan when it comes interest rate hikes, so I think it makes sense that we continue to go to the upside. I have no interest in shorting, I believe pullbacks will be buying opportunities and when I look at the longer-term weekly chart, I see that we are consolidating between the 108 level on the bottom, and the 114.50 level on the top. In fact, the 114.50 level is my target and I believe the dips offer value. We may get some noise from time to time, mainly due to “risk off” incidents around the world, such as North Korea. However, long-term fundamentals I believe dictate that this market goes to the upside, especially of stock markets continue to rally.
I believe that adding incrementally and building up a larger position is probably the way to go, as it gives you the opportunity to profit from what looks to be a slightly upward yet range bound move. If we can break above the 115 handle, then it becomes more of a “buy-and-hold” scenario, but I think we are several weeks away from doing so, if not months. In the meantime, I like this is a short-term buyers’ market, taking advantage of pyramiding to build up equity in your trading account.