The US dollar has been very volatile during the trading session on Tuesday, as we have reached towards the 112.50 level twice. Both times, we have seen buyers jump into the marketplace, so now looks as if the buyers are willing to get involved and push from that region. This is typically a good sign, especially considering that there was a massive selloff that started the move. Because of this, the market looks likely to be building enough momentum to make a significant move, perhaps an attempt to break above the 113.50 level. If we can clear that area, I think the market goes to the 114 handle after that, followed by the 114.50 level, and then the ultimate price: the 115 barrier above.
If we can break above the 115 handle, this market will be more of a “buy-and-hold” scenario, but I think it’s going to take a lot of work to get that done, so it’s likely it will be something that we see down the road. In the meantime, I think that short-term pullbacks are buying opportunities, as I recognize that although the 112.50 level has been supportive, the 112 level was even more supportive than that. I don’t have any interest in shorting, I think that the markets will do the usual correlation to risk appetite, meaning that it goes higher as the stock markets around the world rally, and of course vice versa. By being careful and patient, you can hold up a large position to anticipate the move higher.
Written by FX Empire