USD/JPY Price Forecast February 6, 2018, Technical Analysis

The USD/JPY pair has drifted a little bit lower during the opening hours of Monday, but it looks likely that we are going to continue to find buyers on dips, at least if we can stay above the uptrend line. This is a minor uptrend line though, so even if we break down below there I still think there will be value hunters underneath. A break above the 110 level should send this market looking towards the 111 handle, and then perhaps even higher.

When you look at the longer-term charts, we have been consolidating between the 108 level on the bottom, and the 114 level on the top. I think that continues to be the case, so even if we broke down, I would be hesitant to start selling. On the other hand, it would be much easier for me to start buying on a break out to the upside, but I recognize that it is going to be a very noisy market, but that’s typical for this pair.

What I find interesting is that while stock market traders have been selling, this pair has remained relatively buoyant. It typically moves in lockstep with the S&P 500, but this time it doesn’t seem to be. Because of this, I think it shows that we are ready to go higher, especially if we start to get animal spirits cooking in the stock market again.