USD/JPY Forecast December 19, 2013, Technical Analysis

The USD/JPY pair broke out to the outside during the session on Wednesday, after the FMOC announced that it was in fact going to go ahead and start tapering off of the bond buyback purchase program that has been its hallmark of quantitative easing. Because of this, the US dollar itself got a boost around the Forex markets, and with this pair being so sensitive to be ten-year note interest-rate differential between the two countries, it makes sense that the market continued much higher. In fact, this pair has been signaling that the Federal Reserve was in fact going to have to taper off sooner or later, but the fact that they did it now did catch the markets off guard just a bit.

That being said, don’t expect a straight shot up. After all, the Federal Reserve did say that it was going to keep interest rates extraordinarily low for a longer period of time than initially thought. This of course is bearish for the Dollar, so it is possible that we will get pullbacks from time to time. However, the uptrend is well-established at this point and that being the case we are buying gifts is show even the faintest hint of support.

The 105 level looks all that Don at this point in time, which of course was her next target. Whether or not we can break significantly higher than that between now and New Year’s Day is an entirely different question altogether, but we do think that we will eventually break that level. Pullbacks from the move that we saw during the Wednesday session on the short-term charts could be used to gain a little bit of a value play from present action, but it should be obvious at this point in time that you can only do one thing in this pair: buy.

Going forward, we fully expect to see this market hit the 110 level, and probably continue in a multitier uptrend as we have seen several times in the past with this particular currency pair.


USD/JPY Forecast December 19, 2013, Technical Analysis

Written by FX Empire