USD/JPY Price Forecast February 27, 2018, Technical Analysis

The US dollar has gapped higher initially during Monday trading, but then turned around to break down significantly. By breaking down below the bottom of the gap, it forms a very negative outlook for the pair. We fell rather significantly towards the 106.35 level, and then bounced a bit. However, as I record this video, it looks as if we are trying to roll over at the 50-hour exponential moving average. In general, I believe that the US dollar will continue to be soft, but this pair is a bit different than many of the others as it has a certain amount of risk appetite priced into it. What I mean by this is that as stocks go higher, typically that will put upward pressure on this pair, and vice versa.

I recognize that we had recently broken below a significant support barrier in the form of the 107.50 level, and by doing so it certainly puts bearish pressure on this market. However, I recognize that there is a lot of support underneath, especially near the 105 handle. In other words, although I recognize this as a market that is bearish at the moment, I think that the losses are somewhat limited. Short-term scalping to the downside might be the best way to trade this market, as I expect a significant amount of noise in this market. If we were to break above the 108 level, at that point I think that the market goes much higher.

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