USD/JPY Price Forecast February 21, 2018, Technical Analysis

USD/JPY daily chart, February 21, 2018

The US dollar has rallied a bit against the Japanese yen during the trading session on Tuesday, reaching towards the 107.50 level. That’s an area that was previous support in the past, but I think at the current level, it’s now offering resistance, in what is known as “market memory”. In fact, if the 107.80 level gets broken, then I think the resistance is done. Otherwise, I fully anticipate the market to roll over and start going lower. The US dollar has been struggling in general, and that of course will be reflected against the Japanese yen.

In a competing move, US stock markets rallying could lift this market, as it does tend to be risk sensitive, so I think there are 2 major forces colliding at the same time. This should continue to give this market very noisy, so if you do not have a high-risk tolerance, this might not be the pair for you. I think that short-term trading is probably how this market plays out, as longer-term traders will struggle to feel comfortable. That is of course unless you have the ability to build up a small position, then it could become more of an investment. I do believe that this pair rallies eventually, perhaps in a “risk on” move, especially if the Bank of Japan continues its quantitative easing pattern that it’s been in for years. In the short term, I think traders are paying attention to the bond markets more than anything else, which has been dollar negative for the last several weeks.

Written by FX Empire