The US dollar has rallied during the trading session on Tuesday, reaching towards the 107 handle. Ultimately, the market has a lot of resistance between here and the 107.50 level above. If we can break above there, and perhaps even the 108 handle, the market will be free to go much higher, something that I expect to see happen eventually. Remember, even if the US dollar is falling against many of the other currencies around the world, this pair is a little bit different as it is very sensitive. Typically, the stock markets rallying will put upward pressure on this market as the Japanese yen is shunned during global expansion as the yen is considered to be a safety currency. Although the US dollar is as well, it’s considered to be less so.
I believe that the 106-level underneath will offer support, just as the 105 level will. The 105 level for me as massive support, so I would be surprised to see the market break down below there. If we were to break down below that level, we would almost certainly go to the 100-handle underneath, which of course would be an extensive move. At this point, I believe that it is much more likely for the market to go higher than lower, as the proclivity of stock markets is to the upside as well. It currently looks as if traders are willing to come into this market and buy the dips occasionally.
Written by FX Empire