USD/JPY Price Forecast November 6, 2017, Technical Analysis

The US dollar rallied against the Japanese yen after initially chopping around during the session. The jobs number of course missed, and it sold the pair off, but Americans came back and picked it up again. Ultimately, we cannot break above the 114.50 level during the day, which is the beginning of significant resistance extending to the 115 handle. Because of this, the market has shown that the 114.50 level continues to be very resistive, and that is something that the markets if we cannot break above yet. I think that when we pull back, it’s likely that the buyers will return as it offers value in a market that should continue to favor the US dollar longer-term, with the Federal Reserve looking likely to raise interest rates.
Pay attention to these the ZN futures market, as the 10-year note is very important as far as directionality of this pair is. There is a negative correlation, as when the ZN futures market sells all, it means that we are getting higher interest rates coming out of the United States, which favors the US dollar against the Japanese yen. In fact, the 10-year note is probably the most important secondary indicator that I use for the dollar yen level. I think that the 113-level underneath should continue to be massively supportive, and given enough time we should continue to break out to the upside. This is a market that I believe is in the middle of trying to form a basing pattern for a longer-term uptrend, as the Federal Reserve looks very likely to continue to hike while the Bank of Japan is all but promising to stay as loose as humanly possible soon. Overall, I think that the volatility picks up, but I like buying dips.