USD/JPY forecast for the week of October 13, 2014, Technical Analysis

The USD/JPY pair broke down pretty significantly during the course of the week, making the previous hammer a so-called “hanging man.” This of course is a very bearish sign, but at the end of the day we do not look at this is a selling opportunity. Quite the opposite to be honest, as we see the 105 level as the “floor” in this market. We are looking for some type of support, and the fact that we have not pullback after the recent break out above the aforementioned 105 level suggests that we need this pullback in order to pick up enough momentum to go long and start heading above the 110 level again.