The US dollar fell significantly against the Japanese yen during the day on Thursday, crashing into the 110 handle. By slamming into this area, we are testing significant support, not only in a psychological sense, but also a structural sense. A breakdown below here is possible, but quite frankly I think that this move won’t be much until we get the jobs number coming out later today. That obviously has a lot of influence on the markets, and because of that you should keep an eye on where that figure comes out. If it is above 200,000 jobs added, this market will probably turn around almost immediately and shoot much higher. However, it looks as if the sellers are continuing to punish the US dollar, and that being the case I think that we will continue to see volatility with more of a downward slant.
Major support below
I believe that there is major support below the 109 handle, and it’s in that area that I would look to start buying. I believe that the market should continue to find quite a bit of trouble to break down below there, unless of course the jobs number is absolutely horrible. If it is, and perhaps less than 100,000 jobs is added during the previous month, it would be a very negative sign and could be enough to send the market below the 109 handle. Right now, it appears that the trading public is a bit skeptical as to whether or not the Federal Reserve can continue to raise rates, and that continues to weigh upon the US dollar. This being the case, expect volatility but certainly it looks as if the sellers have the upper hand currently. If the number is not a barn buster number, it’s very likely that this market will continue to fall.
Written by FX Empire