USD/JPY Price Forecast January 29, 2018, Technical Analysis

The US dollar fell significantly against the Japanese yen, slicing below the 108.50 level. There is plenty of negativity in this market, and I think we are ready to wipe out the entirety of the move to the upside that we have seen. The 107.50 level would be the target, and I think that short-term rallies will be selling opportunities. Ultimately, this is a market that continues to favor the downside in general, and I think it’s almost impossible to buy this market. If we break down below the 107.50 level, the market should continue to go even lower. Ultimately, that would be an extraordinarily negative sign.

The US dollar showing such weakness is an anything new, but we have wiped out all the rally that was formed around the words of Donald Trump suggesting that a strong US dollar was what we wanted. That is something that we know not to be true, the US dollar has lost 97% of its value since the Federal Reserve was created. Ultimately, the US dollar needs to be soft for world markets to function, otherwise commodities and other trade is all but impossible for many of the Third World countries to function.

The Japanese yen is of course considered to be a bit of a safety currency, so any shock to the market will send this pair lower. I think that we may get a bit of a bounce, but that bounce should be a nice opportunity to start selling yet again. A breakdown below the 107.50 level could send this market as low as the 105 level.