The US dollar fell initially during the day on Thursday but found enough support near the 110.80 level to turn around and break back above the 111 level. This is a bullish sign, and I think that the market is going to go looking for the 112 level above. I find this interesting, because as I record this it is already trying to take back most of the losses from the previous session and the FOMC dovish statement. Because of this, I think that the market will continue to be volatile, but I won’t be completely convinced until we break above the 112.25 handle to start buying. I think that we could see selling come back into the marketplace, based upon the US dollar, not the Japanese yen.
Looking at the market, all I see is volatility, and short-term trading at best. We could go looking towards the 112 handle for the short-term, but I also say it’s just as likely that we go down to the 110.75 level underneath. This being the case, is very likely that the market will continue to be a back and forth type of range bound affair, because I do believe that there is a certain amount of support underneath to keep this market a lease somewhat afloat. Long-term trading is almost impossible, because there are so many moving parts and of course so much volatility. That being said, I believe that you will need to be very cautious when trading this market.
Written by FX Empire