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US dollar looking for support at ¥110

By:
Christopher Lewis
Updated: May 17, 2018, 05:01 UTC

The US dollar has pulled back a bit during trading on Wednesday, testing the ¥110 level. This is an area that has been previous resistance, so it should end up being support based upon “market memory.” However, there are a lot of things a playwright now that could move this market.

USD/JPY daily chart, May 17, 2018

The US dollar has pulled back a bit against the Japanese yen during trading on Wednesday, looking to the ¥110 level for support. That’s an area that was resistance in the past, so it should in theory at least be a supportive level going forward. I think that if the market can bounce from here, it’s likely to continue to see a push towards the ¥110.50 level in the short term, and then ultimately my target of ¥112.50 during the summer. I think that the market will continue to pay attention to the treasury markets overall, and if they show higher yields, that is reason enough for this market to continue the upside. I believe that there is a bit of support extending down to the ¥109 level, so it’s likely that we will see a bit of a “zone” of support. I don’t think that the ¥110 level is a “hard line in the sand”, so to speak.

Ultimately, I believe that the US dollar is going to have a strong summer, and that of course will reflect in this market as well as many of the other currencies. The session on Wednesday has seen a little bit of softening in the greenback, but when looked at through the prism of the last several days, it is simply just a small pullback. I believe that ultimately we will continue to see buyers jump in and look for those higher yields in America as the Bank of Japan is nowhere near leaving quantitative easing.

USD/JPY Video 17.05.18

About the Author

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.

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