The US dollar rallied at the open on Friday, but you can see fell apart against the Japanese yen as we went into the trading day. This was mainly due to the jobs number being a disappointment out of the United States, which is a typical reaction in this pair. However, the 110.25 level underneath offered enough support to turn things around as we had formed a couple of hourly hammers. I believe there is a massive amount of support near the 110 level, and that should continue to offer a little bit of solace for those who choose to be bullish of the pair. If we remain above that level, I have no interest in selling as there simply isn’t much in the way of room. Quite often, these impulsive moves like this get retraced, and that’s essentially what I’m thinking will happen. After all, we have already seen that by the time noon rolled around New York time on Friday when it comes to the stock markets.
I believe the volatility continues in this market but I also believe that the 110 level being the 50% Fibonacci retracement level from the larger move has helped as well. Ultimately, even if we break down below there I think as low as this market goes as the 108 handle, as it is the 61.8% Fibonacci retracement level. Either way, I think there is much more danger of the market going to the upside than down, at least as far as the short-term is concerned. Quite frankly, we just need to see more of a “risk on” move to push this market to the upside. If we can continue to find support here, the market could move as far as the 111.50 level without too many issues.
Written by FX Empire