The US dollar has pulled back a bit during the trading session on Thursday, reaching down towards the ¥111 level. This is an area that I think should offer a bit of support, but of course this will be greatly influenced by how the jobs number comes out. I believe that the area should be rather stringent though, so unless we get some type of shock in the employment figures, I anticipate that this market will probably find buyers near that level. If we do break down below that level, then I think the market probably goes down to the ¥110.50 level, and then of course ¥110 after that.
Above, the ¥112 level has offered a bit of resistance, and I see another cluster of supply near the ¥112.50 level. In other words, this is a very choppy market but I do think that based upon the recent surge higher that we probably have a lot of interest in this market, and of course the fundamentals lineup for a higher US dollar against the Japanese yen as far as interest rate differentials are concerned.
If we do break down below the ¥110 level, then of course we could have a significant move lower. However, I think that the market is likely to reject that idea, unless of course the jobs number is a huge mess and people begin to worry about whether the Federal Reserve can raise interest rates. Based upon the statement this week, that looks very unlikely.