USDJPY May-December 2015 Forecast: ranging bullish with 122.02 resistance and forming Retracement pattern

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Sergey Golubev, 2015.05.23 12:42

USD/JPY forecast for the week of May 25, 2015, Technical Analysis  (based on fxempire article)

The USD/JPY pair broke higher during the course of the week, as we closed out the 121.50 area. That being the case, it now looks as if we are ready to break out above the potential ascending triangle that it appears on the weekly chart. That of course would be a very bullish sign, as the height of the triangle measures roughly 650 pips. Because of this, we believe that the USD/JPY pair will be very bullish soon, and a break above the 122 level is enough to get us to start buying again. We believe at that point in time that the market should head to roughly 128 given enough time.

Needless to say, the market should have a bit of resistance at the 125 level though, and we don’t necessarily think that it will be the easiest move. However, by the end of the week we started to see US dollar strength just about everywhere, and as a result it seems as if the market is suddenly in favor the US dollar overall again. The US Dollar Index broke above the 96 handle, which of course is very bullish, and the EUR/USD pair suddenly testing the 1.10 level, an area that is indeed important. Ultimately, we have to wait to see what happens on a daily close, but it certainly looks as if the USD/JPY is ready to continue the longer-term uptrend.

Even if we fell from here, we believe that there is enough support below to keep this market going higher, and as a result we look at pullbacks as potential buying opportunities. We think that the absolute “floor” in this market is somewhere near the 115 handle, and with that we have no intentions of selling this pair anytime soon. In fact, we believe that a lot of traders are starting to think longer-term “buy-and-hold” type of thoughts when it comes to this currency pair. Ultimately, the market should continue to find itself well supported, especially considering that the Bank of Japan is so dovish at the moment.