US dollar has bumpy ride against Japanese yen on Wednesday
The US dollar has pulled back a bit during the trading session on Wednesday, testing the 107 level for support. We did start to see it as the Americans started to take over the market, so I think we will continue to try to go higher, perhaps reaching towards the 107.50 level again. That’s an area that is a major resistance barrier, and if we can break above that level, it has the market looking towards the 108-handle next, and then perhaps the 110 handle after that. If we pull back from here, I think that the 106.50 level is also support, and if we were to break down below there, then I think that the US dollar should go down to the 105 handle, an area that has been massive in its support over the longer term, and I believe that we will continue to see that area act as a “floor” in the market.
If we break down below there, the market should then unwind to the 100 level, but I don’t think that happens anytime soon. I believe that we are starting to see more of a “risk on” attitude in the markets overall, and that of course helps this pair. Expect a lot of volatility, but I continue to think that short-term pullbacks will be buying opportunities that people are more than willing to take advantage of. It doesn’t mean is can be easy, but if you add slowly, it’s likely that we will continue to see opportunities to build up momentum and a position accordingly.