USD/JPY forecast for the week of August 7, 2017, Technical Analysis

The US dollar initially fell against the Japanese yen during most of the week, but found the 110 level to be supportive enough to turn around and form a hammer. The hammer of course is a bullish sign, and if we can break above the top of the bullish sign, we will probably go towards the top of the shooting star from the previous week. The 110 level of course is very important, so it makes sense that a lot of attraction would have been geared towards this level. Part of the massive bullish move was due to the jobs number on Friday, being much stronger than anticipated and that of course suggests that the Federal Reserve is going to be more likely to raise interest rates.

Buying a break above the top of the candle

I’m buying a break above the top of the candle for the week, and I believe that we will probably go to at least the 112.50 level. Beyond there, I would anticipate that the market should then go to the 114.50 level. Alternately, if we break down below the bottom of the hammer for the week, that would be a very negative sign and should send this market looking to the 108 level where we have seen massive the support recently. I believe that we will continue to consolidate overall, but I think that the market should continue to chop with a bit of a bullish bias. The 115 level above is massive resistance, and a break above there would turn this into a “buy-and-hold” type of market. Alternately, if we were to break down below the 108 level on a move lower, that would be catastrophic and probably send this market back to the 100 handle.

USD/JPY Video 07.8.17