USD/JPY Price Forecast January 4, 2017, Technical Analysis

The US dollar did very little against the Japanese yen during the trading session on Wednesday, as we hover above the 112 handle. I believe that area will continue to be important, but even if we were to break down below there, the market has plenty of support at the 111 level as well. Ultimately, I think that we are waiting for the jobs number on Friday to make our next move, as this pair is highly sensitive to that announcement. If the jobs number is strong, that typically sends this market to the upside, and of course the opposite is true. The volatility in this pair should continue, but I think that although the US dollar has been falling in general, this pair tends to react a bit differently as the US dollar has been sold off against other currencies, this market often will favor the overall attitude of markets. If the stock markets do well, typically the USD/JPY pair will rise with it.

I believe that the breaking down from here could send the market to the 110 level if we can slice through several minor areas. However, I believe that as the volume has been quiet over the last several weeks, it’s likely that we will have to wait for more significant volume in the market to get involved. The marketplace will continue to bounce around, but I’m not expecting much over the next couple of sessions. Remember the risk appetite factor to this market, where you will find the answer as to which way to trade. In the short term, I think you’re probably best on the sidelines.

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