The US dollar has broken to the upside during the week, slicing through the ¥110 level, an area that is of course psychologically significant level, and of course structural. Beyond that, we also broke above a pair of shooting stars on the weekly chart, a very bullish sign. At this point, it looks as if we are breaking out.
The US dollar has rallied significantly during the week, slicing through the ¥110 level. By doing so, it looks as if we are ready to go higher, as the market has been banging up against that level for some time now, forming a couple of shooting stars on the weekly chart. We are closing towards the top of the overall range, and I believe this point it’s likely that we continue to go higher because of this. I think a short-term pullback is likely to happen, but I think it will only offer a buying opportunity for those who are patient enough to wait for it.
Longer-term, I believe that the market will probably go to the ¥112.50 level, an area that has been important on short-term charts. Longer-term, I believe that the market should then go to the ¥115 level after that which has been significantly resistive. I think that a break above there would send this market into a multi-year long-term uptrend. I think we are trying to do that anyway, as interest rates in the United States continue to climb while the Bank of Japan looks likely to be very quiet. I believe that the market is going to be almost impossible to sell, and I believe that there is a “floor” in the market closer to the ¥107.50 level underneath. Longer-term, I think that the market continues to find reasons to expand to the upside.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.