The ¥110 level has offered enough support to turn things around and send the US dollar above the ¥111 level during the week. That’s a very good sign, showing signs of resiliency and just how important the ¥110 level is going to be. Because of this, it’s likely that we will see the market try to break above the ¥111.50 level and take on the top of the shooting star from three weeks before. Longer-term, we could be looking at a move towards the ¥114.50 level, but there is quite a bit of noise between here and there, and certainly there will be headlines that cross the wire to make this market a bit erratic.
The most important headline is probably going to be based upon the Sino-American trade relations, so keep that in mind. The market participants will be very sensitive to any escalation in the trade war, but currently it seems as if people are somewhat tentatively comfortable with what’s going on right now. If things worsen, that could weigh upon this market, but then again if things get better, that could send this pair much higher as stock markets will certainly rally in the same sense.
However, if we were to break down below the ¥110 level decidedly, then the market could reach towards ¥109, followed by ¥108. At this point, I would not be surprised to see short-term pullbacks, but it looks as if the market is trying to recover.