The US dollar rallied against the Japanese yen during the week as interest rates continue to climb, course putting pressure on the greenback to the upside. I think that the 110 level above is resistance, but I think that the attitude of this market will eventually have the buyers overtaking that area. I recognize that the 107.50 level is supported underneath, so I anticipate that pullbacks are opportunities. The uptrend line underneath should continue to support the market as well, so I believe that longer-term traders are starting to look at this as a market that offers value. If we were to break down below the uptrend line, then I think the market would test the 105 level which it was major support, but at that point I think we would be talking about parity. That’s a very unlikely at this point though, although I see a world of hurt just above that is going to be difficult to overcome.
The 115 level above is a target as well, but that is going to take a lot of work to get to. I think that the 115 level above is extraordinarily important, and a break above there would probably send this market into a multi-year uptrend. I like the idea of buying pullbacks and continuing to build a position longer term as an investment, which is probably the best way to look at this market longer term.
