The US dollar rallied significantly during the trading session on Wednesday, breaking above the psychologically important 113 handle. We did see the 113.33 level offer a slight amount of resistance, but I think at this point it’s likely that buyers will come back into the marketplace if we pull back towards the 113 handle. The 114 level above is the next target, with the 114.50 level offering significant resistance. I don’t think we can break above there between now and the end of the year, but I do think that there’s a longer-term upward proclivity in this market.
If we were to break above the 115 handle, then I think it becomes more of a “buy-and-hold” market, as it would be a significant move. Beyond that, the US dollar is rallying due to tax reform in the United States been good for the economy, and of course the fact that we have interest rates rising in the United States, which of course will have an influence on the overall rate. I believe that the Bank of Japan won’t be doing anything to tighten monetary policy for at least another year, and that of course keeps the market somewhat bullish. In general, I suspect we will eventually break above that 115 handle, and once we do we are free to go much higher. This market continues to be one that I think offers plenty of “buy on the dips” type of opportunities, and then eventually a buy-and-hold situation once we get above the aforementioned 115 handle. Selling is all but impossible for me currently.
Written by FX Empire