USD/JPY Price Forecast February 7, 2018, Technical Analysis

The US dollar rallied significantly during the trading session on Tuesday, as we continue to see a lot of fear in the global marketplace. Ultimately, this is a market that I think has a lot of resistance above, especially near the psychologically important 110 level, so even if we do get pullbacks to find support, I think that the upward momentum is probably somewhat limited. Eventually, people will be looking towards the Japanese yen for safety, even though you can say the same thing about the US dollar. I think that we will continue to see a lot of volatility because of this, but certainly we have found the bottom of the longer-term consolidation area near 108.50 level, and that the level continues to attract a lot of attention. Longer-term, we could go as high as the 114 level above, but I think we will eventually get there. We need to see more of a “risk on” type of appetite in the markets overall to make that move, so at this point I think it’s a bit of a wait and see game.

By jumping in and in small pieces, you can perhaps write that potential moved to the upside, but you need to be aware that you are almost assured of volatility between here and potential highs. If we break down below the 108.50 level, the market is probably going to go down to the 107.50 level, and possibly even lower. At this point, I think this is more volatility just waiting to happen.

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