US dollar rallies during early part of the week only to fall again

The US dollar initially rally during the week, reaching towards the ¥110 level, but found enough resistance to turn things around and form a shooting star. The shooting star is of course a very negative sign, and I think breaking down below the shooting star is a sign that we will drop towards the 107.50 level, an area that had been resistance in the past. It would make sense to fall to that area as structurally we have seen that area offer so much in the way of action. That should be supportive now, and I think that more than likely we will find this pullback as a buying opportunity.

If we break down below the 107.50 level, then I think the market probably drops down towards the uptrend line as you can see. The uptrend line of course is crucial and goes back to the middle of 2016. This is why I think we will more than likely find a lot of support there as well. The alternate scenario of course is that we break above the top of the shooting star, we should then go looking towards the 112.50 level, an area that has been important more than once. Pay attention to the stock markets, they will have an influence on this market as well.

USD/JPY Video 07.05.18