USD/JPY Price Forecast February 5, 2018, Technical Analysis

The US dollar has rallied significantly during the trading session on Friday, showing signs of strength yet again as the jobs number came out very strong. It looks likely that we are going to go to the 111-level next, then possibly even break above there. If we clear that level, the market should then go to the 112-level next, and then eventually the 114 level which is the top of the overall consolidation that we have seen. Pullbacks at this point should offer opportunities given enough time, but if we were to break down below the 109.50 level, the market will probably roll over again and start selling off. We recently have formed a bit of a bottom in this market, and I think that we will more than likely find plenty of buyers looking to get in on pullbacks.

Remember that this pair is highly sensitive to risk appetite overall, so I think that the market pulling back will be indicative of stock market selling off. Pay attention to the S&P 500, it typically is very indicative of how this pair is doing. The interest rate differential in the bond markets of course favor the US as well, so I think it’s only a matter of time before this market rallies significantly. This market has recently seen a massive selloff, but it now appears as if the buyers have returned longer term.