USD/JPY Forecast July 15, 2013, Technical Analysis

The USD/JPY pair had a slightly positive session on Friday, but as you can see we couldn’t get to the 100 handle. Because of this, we think that this market is going to simply grind sideways for a minute or two, because the area should be significantly important yet again. However, with the recent release of the FMOC minutes, there is a serious concern about whether or not the Federal Reserve will taper off of the quantitative easing path of the event on in September. A lot of market participants had priced that end, and as a result the US dollar has been on quite well. However, with this latest release there seems to be a bit of confusion and doubt.

With that being said, it’s very likely that this pair will continue to chop around. However, we are very suspicious of any drop in this market, simply because the Bank of Japan is working so hard against it. With that being the case, we feel that this is a “buy only” market at the moment still, and we are looking for those by signals in order to take advantage of that. After all, this was thought to be a multi-year trend is trying to start, and nothing less.

If we managed a daily close above the 100 handle, we think that is a strong enough sign to start buying this market. The reason is mainly because of the large psychological significance of the 100 handle, and the fact that a lot of people will be there trying to push price down.

With the current formation of candlesticks, we believe that this area will more than likely see a bit of consolidation though, and that the 99 handle is rather supportive. If we managed to break down a bit, we do not believe that this market can get below the 95 handle at this point in time. If we gods a move down to that level, we believe that there will have to be a significant amount of support, and would jump all over the chance to buy the pair down that low, because it would simply be “cheap.”

Written by FX Empire