We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
More View more
Real Time News
  • What are a few of the common trading mistakes made by traders? Find out from @WVenketas here: https://t.co/Q3sPmP2rya #tradingstyle https://t.co/sSU5q2ObQm
  • Missed today's Cross-Market Weekly Outlook webinar? See the recording here: https://t.co/d1rb3hCZTH We discussed: - US-China #trade deal - #Brexit outlook after the UK general election - US #Dollar outlook going into 2020
  • European Opening Calls From IG: #FTSE 7392 +0.53% #DAX 13346 +0.48% #CAC 5955 +0.60% #AEX 607 +0.74% #MIB 23509 +0.77% #IBEX 9622 +0.61% #STOXX 3754 +0.61%
  • Traders should know how to confidently approach, enter and exit both Bull or Bear markets. Need some insight into it? Get it from @nickcawley1 here: https://t.co/GhvvFrB3gz https://t.co/IbzSBk5Hb1
  • Join @DavidCottleFX 's #webinar at 3:00 AM ET/8:00 AM GMT for your weekly update on the top Asia Pacific market drivers that traders should watch this week. Register here: https://t.co/HNf3Axw8s5 https://t.co/iMMiza1J1d
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/im72E4Szmi
  • The Riksbank – the world’s oldest central bank - will exit its negative interest rate policy for the first time in known history as officials explore uncharted territory with unknown consequences. https://www.dailyfx.com/forex/fundamental/article/special_report/2019/12/16/Worlds-Oldest-Central-Bank-to-Exit-Negative-Rate-Policy-First.html
  • The Indonesian Rupiah, Malaysian Ringgit, Philippine Peso and Singapore Dollar may continue their rise against the US Dollar on global optimism amid a US-China trade deal #ASEAN #IDR #PHP #USD - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/12/16/Indonesian-Rupiah-Malaysian-Ringgit-May-Rise-on-US-China-Deal.html?CHID=9&QPID=917702 https://t.co/GYaUYookwM
  • LIVE NOW: In this session, Currency Analyst @ZabelinDimitri will preview the upcoming week's main political themes and discuss their impact on financial markets. https://www.dailyfx.com/webinars/146770987
  • LIVE IN 30 MIN: In this session, Currency Analyst @ZabelinDimitri will preview the upcoming week's main political themes and discuss their impact on financial markets. https://www.dailyfx.com/webinars/146770987
USD/JPY Rate Forecast: Battle Of The Weakest At 2018 Open

USD/JPY Rate Forecast: Battle Of The Weakest At 2018 Open

2018-01-04 19:47:00
Tyler Yell, CMT, Currency Strategist

USD/JPY Rate Forecast Talking Points:

  • USD/JPY Price Forecast: buyers likely to continue pushing price higher above 112
  • US Dollar is attracting hedge funds after rare-aggressive market selling in December
  • USD/JPY Rate Insight from IG UK: sharp rise in retail long positions favors downside

The spot price of the Dollar Index fell 9% over 2017 and in so doing, allowed a surprising amount of JPY strength that many did not anticipate with the persistently strong risk sentiment as evidenced by the record highs in equities.

US Dollar Falls toward Weakest Level of 2017

While the USD/JPY rate is a long way away from the 2017 low at 108, traders are likely scratching their head as to why the rate has not risen. Some blame the potentially increasingly hawkish (relatively speaking) Bank of Japan while others see the Fed’s hawkishness (absolutely speaking) as fully priced into the market. Either way, traders should note that the JPY has weakened aggressively against other currencies, most notably EUR.

Check out this great EUR/JPY analyst pick here.

USD/JPY Rate Forecast Looks to Ichimoku for Support

On the price chart with the Ichimoku Cloud technical study applied, traders can see that price looks to be testing support. The cloud base is near 112.30, but looking to the future Kumo (cloud), traders can see little conviction one way or another as the cloud has thinned out.

It’s no small coincidence that the thinning cloud is showing the uncertainty of the future trend (thick clouds tend to indicate a strong trend bias) at the beginning of the year. Traders, whether institutional or retail, tend to see the beginning of the year as the time to make their stakes on their broader macro views and so position setting tends to be strong at the beginning of the year. The beginning of the year and the uncertainty as evidenced by Ichimoku could lead to a nice jump in volatility, which has been supported by the jump in USD/JPY 1-month implied volatility that recently touched the lowest level

Unlock our Q4 forecast to learn what will drive trends for the Japanese Yen and the US Dollar by year-end!

Please add a description for the image.

Chart created by Tyler Yell, CMT. Tweet @ForexYell for comments, questions

The short-term resistance of USD/JPY is at the 55-DMA at 112.96 with support at 112.30, the Ichimoku Base and further at 112.10 (100-DMA). Given the time of the year and the lowest implied volatility since 2014, which was an all-time low in FX vol, a breakout that aligns with an increase in implied volatility could be a recipe for a move toward 113.15 (Dec. 27 low) and the 113.75 (Dec. 12 high).

The last three completed trading years have provided dismal moves in USD/JPY of 0.8%, -2.85%, & -3.65% respectively. A key move worth watching would be a jump in implied volatility and a breakout above resistance. However, absent that development, traders should watch for a further slow melting of the price below current price support of 112.

USD/JPY Insight from IG UK Client Positioning

Please add a description for the image.

The sharp rise in long retail positions, coupled with the drop in short-positions provides a contrarian bias to favor further losses.


Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.