USD/JPY Forecast November 3, 2017, Technical Analysis

The US dollar has bounced around during the trading session on Thursday, as we awaited the jobs number for today. This pair tends to be highly influenced by the jobs announcement, and of course the treasury markets, so we should continue to see this market move in correlation to those movements. Today is can be interesting though, because if we can break out to the upside, the 115 level is the top of the massive resistance, and clearing that would be more of a “buy-and-hold” trade. At that point, I anticipate that the market would go to the 118 handle, which is structurally resistive.
The jobs number being better typically favors this pair to the upside, but the jobs number disappointing tends to sell off. The expected announcement is 310,000 for the month of October, so keep that in mind. I believe that the 113-level underneath is massively supportive, and a drop to that level probably gives us an opportunity to pick up a bit of value. If we were to break down below the 113 level, that would be extraordinarily negative, but I doubt that happens. If it does though, the 112 level is the next major support barrier. In general, it’s best to leave this market alone during nonfarm payroll Friday, or at least wait for it to get a bit to over extended in one direction or the other to play a “reversion to the mean” trade.
Another thing to pay attention to is the ZN futures chart, as it is the 10-year note. As an inverted correlation is what you see between these 2 markets, if it starts to fall, this market should explode to the upside as a means higher interest rates in the United States. Alternately, if the market rallies in the ZN market, this pair should fall.