The US dollar initially tried to rally against the Japanese yen, but then rolled over at the 113.25 level. We dropped down to the 112.75 level, where we had seen a bit of support. I believe that ultimately, the market will probably try to rally from here, and follow the overall uptrend that we have seen lately. I think that given enough time, the overall risk appetite of traders will push this market higher. On top of that, the Federal Reserve looks likely to raise interest rates, or at least tight monetary policy in general, so I think that the market will reach towards the 113.25 level, and then the 114.50 level above. Because of this, the market will be testing the top of the overall consolidation, and that of course is typical back and forth action. If we can break above the 115 handle, the market would be free to go higher, perhaps reach towards the 118-level next.
Even if we do pull back from here, I think there are more than enough opportunities below to pick up value as well. I believe that the 112 level is massively supportive, and that the bottom of the overall consolidation is at the 108 level. I believe that we pull back in this market, it’s going to be a nice buying opportunity based upon supportive action. I think the given enough time, both buyers and sellers will be able to make money, as the volatility continues. Remember that the pair tends to move with the overall stock markets in general, and that of course should be a tertiary indicator that you’re paying attention to, the S&P 500, the DAX, and the like. Ultimately, I think that the markets go higher with the stock markets as all look healthy.
Written by FX Empire