USD/JPY Price forecast for the week of February 19, 2018, Technical Analysis

The US dollar has broken down significantly during the week, slicing through the 107.50 level, an area that has been supportive for quite some time. Ultimately, you will probably see this market reach towards the 105 level, as it was previous resistance. I don’t know if we can find enough buyers there, I think it will come down to what goes on in the bond markets. If we do bounce from there, I think that the 107.50 level will be resistive. Otherwise, if we break down below the 105 level, the market should then go down to the 100 level longer term, which is essentially parity in this market.

There is a lot of noise underneath, as the 105 level begins a major consolidation area. I think that this will remain a “sell the rallies” move until we can break above the 107.50 level, which would show that we are reentering the previous consolidation area. Obviously, there is a bit of a risk appetite part of the equation that you should pay attention to as well, as the Japanese yen tends to strengthen when people are concerned about the stock markets, or risk appetite in general. Otherwise, it’s possible that we could get some type of turn around, but it is going to need to be accompanied by bullish pressure in the stock markets, the commodity markets, and most importantly, the US treasuries market. It will probably be difficult to hang onto a longer-term trade in this market, so short-term trading will probably be the route to take.

USD/JPY Video 19.02.18