USD/JPY continues to build momentum

The US dollar has initially pulled back during the week but turned around to show signs of strength again. The 107.50 level has offered a bit of resistance, so it’s not until we break above there that I think that the momentum picks up. In the meantime, I think we are going back and forth during the next few weeks, as the uptrend line should offer support. The 105-level underneath would be supportive as well, and I think that ultimately the buyers will probably come into this market if we can avoid some type of trade war between the United States and China, and of course if we can get strong economic news from some other front.

The alternate scenario is that we turn around a breakdown below the 105 level, and that would send the market much lower, perhaps down to the 101 level. If we can break above the 107.50 level, the market then should go to the 110 level above, which is an area of interest from longer-term perspectives as well. Remember, this pair is a wrist sensitive market, so if the stock markets overall seem positive, this market should as well. Longer-term, I think that we continue to find buyers underneath, and I think that we will likely see a lot of value hunting given half a chance. In the meantime, expect a lot of volatility, so I would keep my position size small, and then add on a break out to the upside and above the 108 level.

USD/JPY Video 09.04.18