USD/JPY Price Forecast January 23, 2018, Technical Analysis

The US dollar has gone sideways during the trading session on Monday, as we continue to bounce around just above the important 110 handle. I think that level should be rather important over the longer term, as it is the 61.8% Fibonacci retracement level from the most recent move higher. I think that the market will eventually find reason to bounce, perhaps based upon risk appetite as this pair tends to climb with the stock markets. After all, stock markets around the world have done quite well, and I think that it is only a matter of time before we continue to see the Japanese yen selloff.

However, this move higher could be a bit slower than some of the other currency pairs, at least as far as the Japanese yen is related. This is because the US dollar itself is under certain amount of pressure worldwide, so you would get less “bang for your buck” in this pair than you would in another one, such as the GBP/JPY pair. Alternately, if we break down below the 110 handle, I think we will go to the bottom of the overall movement, reaching down to the 107.50 level over the course of the next couple of weeks.

Never forget the risk appetite aspect to this pair, and trade accordingly. If we continue to see stock markets rally, that should eventually drive this pair towards the 112 handle above. Otherwise, if we get some type of major shock to the system, this should be one of the first pairs to fall apart.