USD/JPY Forecast May 9, 2017, Technical Analysis

USD/JPY daily chart, May 09, 2017

The USD/JPY pair had a volatile session on Monday, as we initially gapped higher, and then turned around to fall rather significantly. However, about halfway through the session we formed a nice-looking hammer on the hour chart, and at that point the market bounced significantly. It now looks as if we are trying to reach towards the 113 handle above, and on the longer-term charts I certainly favor the upside as I think we will eventually go looking for the 115 handle. Remember, this pair is sensitive to the jobs number which came out stronger than anticipated on Friday, and of course it is a little bit sensitive to risk appetite in general, which of course can be identified by what’s going on in the S&P 500 and other stock indices around the world. Currently, I believe that the 112 level is essentially the “floor” in the market.

The buyers are starting to come back

I believe that the buyers are starting to come back into this market, and although it has been somewhat choppy over the last several sessions, the fact that we broke above the 112 level was indeed important. I think the 115 level is the “ceiling” currently, but given enough time I believe that we could break above there. Ultimately, this is a market that shows a significant amount of volatility, but I do think that eventually the interest rate expectations coming out of the Federal Reserve continue to push this market to the upside. After all, the Bank of Japan is light years away from doing anything interest rate wise, so I believe it’s only a matter of time before the buyers come out on top. Shorting isn’t even a thought into we break well below the 112 level again.

Written by FX Empire