USD/JPY Price Forecast January 22, 2018, Technical Analysis

The US dollar has fallen a bit during the trading session on Friday, reaching down towards the 110.50 level. That’s an area that should continue to be somewhat supportive, but I think there is even more support at the 110-handle based upon the longer-term charts, so at this point I would not be overly concerned if we continue to drift lower. The closer we get to the 110 handle, the more likely we are to see the buyers come back in based upon value, and of course keep in mind that the pair tends to be sensitive to risk appetite, as the stock markets have a correlation to this pair. I believe that we will eventually go looking towards the 111 level again, and then eventually the 112 level. I don’t think that it’s likely to break down, but if we were to slide down below the 110 handle, that wipes out the 61.8% Fibonacci retracement level of the most recent move to the upside. If that happens, it’s likely that we wipe out the entire move, possibly sending this market as low as the 107.50 level.

I believe that we will continue to see a lot of choppiness in this market, essentially consolidating between 110 on the bottom, and 113 on the top. As we are closer to 110, it makes sense to be bullish in your bias than anything else. It’s difficult to suggest hanging onto a trade for a long period of time, as the choppiness will more than likely continue over the next several sessions.