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USD/JPY forecast for the week of December 18, 2017, Technical Analysis

By:
Christopher Lewis
Updated: Dec 16, 2017, 05:03 UTC

The US dollar has had a slightly negative way, reaching down towards the 112-handle underneath. That of course is a very important level, as it is the 38.2% Fibonacci retracement level from the lows. I think that the market is going to continue to be noisy, but it appears that we are ready to go higher longer term.

USD/JPY weekly chart, December 18, 2017

The US dollar has fallen a bit over the course of the week, reaching down to the 112-handle underneath. That’s an area that is supportive, as we have seen a bounce from there a couple of times now. The market looks likely to continue to cause a lot of volatility, and you need to keep in mind that the pair tends to be sensitive to risk appetite overall. Because of this, pay attention to the stock markets as they tend to dictate where we go next in this market. Ultimately, I believe that we will reach towards the 114.50 handle, and perhaps even a break above the 115 handle. This will be exacerbated of tax reform can finally get done in the United States, which looks more likely now than previously.

Even if we do break down from here, I think that the 110-level underneath should be massively supportive, and of course the 108-level underneath. In general, I think that it is buying on the dips should continue to be the case going forward, and that we will eventually be able to build up a larger position in the US dollar over the Japanese yen. I believe that the Bank of Japan will continue to be very soft with its monetary policy, and that should continue to be another reason this market should go higher over the longer term.

USD/JPY Video 18.12.17

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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