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

The US dollar has rallied a bit during the trading session on Wednesday, reaching towards the 106.50 level. This is an area that has been noisy more than once, and it looks as if we are trying to build up enough pressure to suggest that traders are anticipating a potential suggestion of for interest rate hikes this year. If that’s the case, that should send this market towards the 107.50 level rather quickly. That’s an area that has been resistance in the past, and I think that it will continue to be. However, if we get signs of that 4th interest rate high, it’s likely that we will break above that level.

Ultimately, if we are only going to get 3 interest rate hikes, we could go back to a “risk on/risk off” situation. If that’s the case, we will probably roll over and reach towards the 105.50 level, the beginning of massive support down to the 105 level. There’s also an uptrend line that coincides with that area, so it’s likely that buyers would be interested in picking up a bit of value in that area. However, if we break down below the 105 level, the market would unwind to the 100 level. I expect to see a lot of volatility, but it looks as if the market is expecting bullish pressure to come into play, so I anticipate that it’s starting to show its hand. Regardless what happens next, I think it’s going to be very noisy, so keep that in mind and keep your position size small until we get some clarity.

Written by FX Empire