USD/JPY Price Forecast January 12, 2018, Technical Analysis

By initially tried to rally, but then turning around to form a bit of a shooting star, this shows that the US dollar is ready to continue going lower. I think that the 111 level will be the first target, and then possibly the 110 level after that. This is a market that had a major breakdown after it was suggested that the Bank of Japan may step away from quantitative easing a bit, and now with poor PPI numbers as well as other announcements coming out of America, the US dollar has been pummeled again. I think a break below the 111 level almost certainly send this market looking towards the psychologically important 110 level, which is just below the 61.8% Fibonacci retracement level of the recent move. If that happens, I would expect that value hunters will appear in that general vicinity, as we could see the market continue to try and consolidate.

I suspect that you can probably buy in that area, but right now it looks as if we are certainly going to try to go to the downside. Alternately, if we were to somehow break above the 112 level, then I think the market goes towards 113. Expect a lot of volatility, because quite frankly this pair tends to be volatile, but it is also very risk sensitive, and ties in quite nicely with the S&P 500 and other stock indices around the world. Pay attention to the overall attitude of markets and whether people are willing to buy things, because if they are typically we will see buyers jump in here as well.

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