USD/JPY Price Forecast February 14, 2018, Technical Analysis

USD/JPY daily chart, February 14, 2018

The 107.50 level underneath is the bottom of a larger consolidation area that the pair has been in for some time, and the fact that we slammed into it during trading on Tuesday suggests that we are about to make a serious decision in this pair. I believe that if we can stay above the lows during the day, we will eventually find buyers looking to pick up value. The market has been consolidating between the 107.50 level underneath, and the 114.50 level above. This has the potential to be a good move, but I think you will need to be very patient with any type of bullish pressure. The S&P 500 tends to have a positive correlation to this pair, so you want to see US stock markets rally.

If we were to break down below the 107 handle, then I think we will open the door to the 105-level underneath, an area that has attracted a lot of attention in the past. Because of this, I have a couple of clear theories going on in this pair right now, with one being an opportunity to buy this pair, but I recognize that if it’s time to bailout of the trade, instead of sitting on the sidelines I would be a seller. I think this is more of a “binary trade”, meaning that we are doing one thing or the other, and you can think of any position you put on initially as “paying for information.” Once you get that information, you get to act on it.

Written by FX Empire