USD/JPY Forecast October 9, 2017, Technical Analysis

The US dollar exploded to the upside during the trading session on Friday after the jobs number came out a bit mixed. Ultimately, most traders will ignore the jobs number anyway, mainly because of the effect of 2 hurricanes. The 10-year interest rates in the United States rallied, and that of course pushed this market higher. The USD/JPY pair tends to follow that market, as the 10-year notes in Japan give almost no return. Because of this, I think that the market continues to reach towards the top of the recent consolidation area, which is the 114.50 handle, and extends to the 115 handle. Ultimately, if we can break below the 115 handle, the market should continue to go higher, and give us more of a “buy-and-hold” market to deal with.
The market should continue to offer buy on the dips trades, and I’m looking for support after pullbacks to take advantage of what has been an explosive move on Friday. I believe that eventually we will break out to the upside, and reach towards the 120 handle. The 120 handle of course will offer a significant target based upon the large, round, psychologically significant number. I think that the market should continue to be volatile, but I believe that overall the buyers will prevail as the US dollar has been enjoying a bit of a resurgence against the Japanese yen. It’s not until we break down below the 112.00 level that I would be concerned about the uptrend, and even then, I think there’s plenty of support underneath. Longer-term, I believe the buyers will have their say, and as interest rates rise in the 10 year note markets in America, that should continue to put upward pressure on this market. Also, as stock markets rise, this pair should too.