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

The US dollar has been very noisy against the Japanese yen during trading on Tuesday, especially near the 106 handle. That is an area that has been resistive in the short term, but I think that if we can break above the 106.50 level, the market probably goes higher, perhaps reaching towards the 107 level and then eventually the 107.50 level after that. The 107.50 level is massive resistance, but if we break above there we will probably continue to go towards the 110 level longer term. This should continue to be affected by how US stock markets and risk appetite present themselves, most notably in the S&P 500. Beyond that, if we get higher interest rates of the United States, typically that will drive this pair a bit higher, if the stock market doesn’t get hammered.

It looks as if talk of a trade war has been overblown, and it seems that people are willing to start investing again. I think that these short-term pullbacks will continue to offer value the traders are willing to take advantage of, perhaps picking up the cheap US dollar as we may have gotten a bit oversold over the last several sessions. I don’t think will break above the 107.50 level easily, but eventually we will and continue to climb from there. This is a pair that is historically cheap right now, and I think that given enough time we will see that massive move higher. I still see the 105 level as the “floor.”

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