USD/JPY Price Forecast November 13, 2017, Technical Analysis

The US dollar has been very choppy against the Japanese yen during the Friday session, as the 113.50 level has offered a bit of resistance. I think that the market will continue to be very noisy, but I also recognize that the 113 level should offer support. Even if we were to break down below that level, I would not have any interest in trying to short this market, because I see a significant amount of support at the 112.50 level based upon the previous downtrend line that we have broken above. I believe that the market will eventually turn around due to the interest rate differential between the 2 economies, but currently we are focusing a bit more on the US Congress and it’s an ability to do tax reform. Ultimately, this is a market that will probably continue to be very noisy, but I think that given enough time we will see a turnaround and a longer-term “buy-and-hold” attitude come into play. That would require a move above 115, something that’s going to take a lot of work to get to.
I believe that once we do turn around and rally a bit, I think that it’s a market that you can add on dips. The Japanese monetary policy continues to be very negative, and therefore I think that eventually the buyers will come back, due to the Federal Reserve looking very likely to raise interest rates over the next several months. I think that once we break above the 115 handle, then it becomes a “buy-and-hold” market that you are then looking to add to your position, pyramiding your way to much higher profits. However, if we were to break down below the 112 level, that would ruin this thesis, and perhaps send this market down to the 108 level. That of course would take some type “risk off” event.