USD/JPY Price forecast for the week of December 4, 2017, Technical Analysis

The US dollar initially rally during the week, reaching as high as the 113 handle, but the surprise announcement that General Flynn is willing to testify against the White House in the Russian scandal, sent the US dollar much lower on Friday. The resulting weekly candle is a bit of a shooting star, and it looks like we could pull back from here. If we break the bottom of the shooting star, that of course is a very negative sign, but at this point I think it only means that we go to the 108 level below, which was the supportive level from the consolidated area that we have been in the entire year. In other words, not much will have changed. If we break above the top of the shooting star, especially after this news, that means that we are going to make a very serious run at the 114.50 level above, and try to break above the psychologically important 115 handle. That won’t be the easiest moved to make, but by not pulling back very deep on this latest selloff, that would be a very strong sign.

The interest rate differential between the 2 central bank should continue to favor the US, but right now this is obviously more of a news driven currency pair, and of course the US dollar has taken it on the chin due to what could be thought of as a potential crisis. At the end of the day though, these things often turn out to be a lot less exciting than originally portrayed.

USD/JPY Video 04.12.17