USD/JPY Price Forecast November 20, 2017, Technical Analysis

USD/JPY daily chart, November 20, 2017

The US dollar fell significantly during the trading session on Friday, and then bounced slightly to only roll over again. We have tested the 112 level, and if we can continue to go lower from here, the market will probably break down to the 108 level after that. That is the bottom of a longer-term consolidation area during the past year, and that is something to pay attention to. If we break down from here, I believe that area will offer a significant amount of support. That level is the “bottom” of the market as far as I can see, and quite frankly I think one of the biggest drivers of this move lower has been the lack of the ability for the United States Congress to pass a tax bill. Because of this, I think that it’s only a matter of time before the market rallies, because politically speaking, the Republicans absolutely need to pass this bill before the midterm election.

Because of this, I think that the breakdown will be an opportunity to pick up value in a market that should rally significantly after that bill is passed. Because of this, I think that the market will continue to be softer several weeks, and therefore a breakdown would not be surprising. However, I’m also looking for an opportunity to turn things around and take advantage of a longer-term move. If we break above the 113 level in the short term, then I consider that this market is going to rally and continue to break out to the upside as well. Either way, it’s can be volatile, but anything involving the Japanese yen typically is. The noisy trading conditions should keep traders trading with small position size due to potential damages.

Written by FX Empire