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USD/JPY Daily Outlook- March 27, 2014

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

The USD/JPY pair fell during the session on Wednesday, testing the 102 level. However, you can see that we did get a little bit of a bounce towards the end of the session although it wasn’t enough to form a hammer or anything. Nonetheless, I can see that it is a somewhat supportive looking candle, and as a result I don’t think that the markets necessarily ready to fall apart at this point. Quite the contrary, I believe that this market is going to consolidate, with the 101 level being the absolute “floor” in this market. In the long run, I am bullish of this market, and believe that we will ultimately test the 105 level, albeit down the road and not necessarily anytime soon.

As you can see, the market has been consolidating for about three months now, and as a result I believe that a lot of traders are asleep at the wheel. I believe that ultimately this market will go much higher, and it will more than likely be based upon jobs numbers out of the United States. After all, the Federal Reserve is tightening its monetary policy, albeit slowly, while the Bank of Japan is currently trying to find new ways to loosen up its monetary policy.

Jobs numbers

Remember, what the Federal Reserve can do as far as interest-rate differential is concerned will be directly related to the jobs market in the United States. With that, I believe that a healthy jobs number in early April could be the overall catalyst to send this market much higher. The meantime, I believe that this market will continue to consolidate, so therefore if we were to get some type of significant fall from here, I would be very interested in buying somewhere near the 101 level. On the other hand, if we managed to break above the 103 level, I would be looking for a move to the 105 level at that point in time, as it is the next resistance zone. Going forward, I fully anticipate seeing this market break above that 105 level, but it’s going to take some time.

USDJPY Daily 32714

Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

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