USD/JPY forecast for the week of July 17, 2017, Technical Analysis

The US dollar initially tried to rally during the week but found enough resistance below the 115 level to turn around and fall significantly. Most of this would have been due to the poor economic numbers coming out of the United States, which had a significantly negative effect on the US dollar in general. Because of this, I believe that the market is probably going to go looking for support at lower levels, as we may have to continue the consolidation in general. If we were to somehow turn around and break above the 115 handle, then I think that the market could go much higher. In the meantime, though, I think that the momentum needs to be built up to finally make that move higher.

The floor at 110

I believe that there is a floor at the 110 level, and therefore every time we pull back in that area it’s likely that the buyers will jump in and take advantage of what should be thought of as value. We have broken above a major downtrend line, and now it looks as if we are going to find value hunters in this market. Given enough time, the market should then go to the 118.50 level on the break out, and then possibly the 120 level. I think that ultimately, we will find a supportive candle that we can buy. Markets look likely to continue to find buyers, but the recent rally may be a bit overdone. This time of year, tends to be rather quiet, so it looks as if we may have more sideways movement in the short term than anything else. I still believe in the 110 level being the floor, even with a pullback during this negative candle.

USD/JPY Video 17.7.17