USD/JPY: January 2016 Forecast - 31 December 2015

The USD/JPY pair continues to grind sideways overall as the 118.50 level has offered significant support. I believe that this will continue to be the case, and as a result I think that it’s only matter of time before buyers push this market much higher. I believe that the uptrend should continue given enough time, but we may have to pull back in order to find the support near the 118.50 level. A supportive candle should be a buying opportunity, and we should reach towards the 123.50 handle. I also think that the 120 level is psychologically important, so at this point in time I believe that there’s far too much in the way of positivity for the US dollar in general, so I can only buy this pair. I think that the interest-rate differential will continue to push this market higher, so at one point or another the buyers will take over again.

Buying Dips

At this point in time, I believe that the market is one that you can buy dips and, and I believe that the theme going forward will be very much the same. I believe that the month of January will end up being positive, as liquidity should pick up after the holidays. I believe that this market will try to get back to the 1.25 handle and will break above there over the longer term.

Longer-term trend is most certainly to the upside as far as I can see, so once we get above the 125 level I think that it is a “buy-and-hold” situation, but between now and then you will have simply buy dips off of shorter-term time frame such as daily or even four hour charts. It’s really not until we break down below the 115 level that I think the trend would change back to the downside, but at this point in time I don’t see it happening anytime soon.

USDJPY

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.