US dollar pulls back initially on Friday, only to find buyers again with higher interest rates

The US dollar has initially pulled back during the trading session on Friday, reaching towards the 107.50 level to find support. The market continues to show bullish pressure, but I also recognize that it could be very choppy. I look at the 107.50 level as a major support level now, as we have broken out to the upside. I also recognize that the 108 level is important, and it could open the door to the 110 level. I believe that the market should continue to find buyers underneath, if the interest rates can continue to rise in the United States. I believe that the Japanese yen is going to continue to suffer in general, especially if we can get some type of calming of trade tensions.

Beyond that, there’s word that the NAFTA negotiations are going well, and that should of course help the US dollar in general. I think it also should help risk appetite, which is a major driver of this pair also. Pay attention to the S&P 500, because of a continues to rally that should be good for the US dollar against the Japanese yen as well. I like the idea of buying pullbacks, but if we were to break down below the 107.25 level, then I would be a bit concerned. That’s not to say that this is going to be an easy trade to take to the upside, just that it’s the most likely to happen.

USD/JPY Video 23.04.18