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USD/JPY Forecast January 8, 2016, Technical Analysis

Daily Forex Reports | by FX Empire | Friday, 08 January 2016 06:09 UTC

The USD/JPY pair fell during the session on Thursday, breaking well below the 118 level which we had previously suggested was massive support. The fact that we turned back around to form a hammer suggests that the markets are waiting for the jobs number coming out later today. This pair tends to be highly sensitive to that, and if we can break back above the red line at the 118.50 level, I feel that the market should continue to go higher. That of course is a very bullish sign, and could send this market as high as the 120 handle. On the other hand, if we break down below the bottom of the range for the session on Thursday, that would be very negative.

Can break down below the bottom of the hammer should send this market down to the 116 level next, and quite frankly the fact that the Nonfarm Payroll number comes out today is probably the only reason that the market stopped falling during the Thursday session. This has been a very “risk off” week or so in the Forex markets, and that could continue. However, the market will collectively pause waiting for the jobs numbers to come out.

If the jobs numbers better than expected, it will be positive for this pair. However, it will be muted compared to other such situations, as the Federal Reserve has recently released its Meeting Minutes, which of course means that the market has a general consensus on what the central bankers had thought at the last meeting. Quite frankly, although they raise interest rates it seemed to be by the narrowest of margins due to the conversations, and as a result it would take an extraordinarily strong jobs number to push this market to higher levels for any real length of time.

With that being said, the rally would probably be somewhat short-lived, as we should continue to see quite a bit of volatility. We believe that the 120 level will be difficult to get above, but certainly we should see some type of positive movement if the jobs number works out in favor of the Americans. If the market breaks down, the 116 level should be quick to be found.

USD/JPY Forecast January 8, 2016, Technical Analysis

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