USD/JPY Daily Outlook- Feb. 7, 2014

Christopher Lewis

The USD/JPY pair rose during the session on Thursday, breaking the top of the two previous candles. Both of those candles were hammers, so this of course caught my attention. On top of that, this candles were sitting at the 50% retracement of the big move higher, so it is very telling that the 50% Fibonacci retracement level was in fact honored. This only reinforces my theory that this pair is still in an uptrend, even though the pullback has been significant. I still look to sell the Japanese yen, and am actually short of the Yen against other currencies right now.

This pair tends to typically be very sensitive to the nonfarm payroll number that comes out today, so this market could be the place to be. After all, we have two central banks that are on opposite ends of the spectrum, as the Federal Reserve has started to taper albeit slightly, but at the same time the Bank of Japan is just starting its quantitative easing. So if there is a decent jobs number, it follows that the US dollar should strengthen against the Japanese yen, as the Federal Reserve will probably look to taper even further.

105

I believe that the market is trying to hit the 105 level, and will eventually. After all, that was the most recent high, and if we can get above that area then I think it opens the door to reach the 110 handle. I have recently been quoted as saying that the 110 handle was my target over the next several months, and that has not changed although I am the first to admit that this jobs report out of the United States is going to have a massive effect on whether or not that happens. After all, the December jobs number was pathetic, so having two in a row would be very bad news indeed as far as tapering hopes are concerned. With that, pay attention to the announcement and I would believe that the better the number, the higher this pair goes. If it is an absolutely surprisingly strong number, this pair probably shoot straight up.

USDJPY Daily 2714

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.