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

The US dollar has fallen significantly during the trading session on Friday, reaching down towards the 105 level, which is an area that I’m very interested in. Not only do we have a large, round, psychologically significant figure, but we also have an uptrend line on the longer-term chart that defines the uptrend. In other words, if we can break down below the 105 handle, this would be very negative for this pair, and could send it much, much lower. At that point, I anticipate that the market will probably reach towards the 100 level below. However, this is also an area where the buyers might get involved, so it could be presenting a nice opportunity.

I suspect that most of the reaction in this market will be due to noise and news coming out over the course of the weekend. With the United States let been a 25% tariff on steel, the world awaits to see what the Chinese and the Canadians do. If we start to see a bit of a trade war, it will be interesting to see how the Forex markets react. I believe that safety currencies will continue to be bought at that point, and although the US dollar is a safety currency, it plays a secondary role to the Japanese yen in this scenario. As I record this, we are starting to roll over towards the 105 handle again, which I suspect is the trading market telling us that they don’t want to carry positions over the weekend. Because of this, I am flat of this pair but recognize that we will get an impulsive move that we can react to soon.

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