The US dollar rallied a bit during the trading session on Friday, reaching above the ¥110 level. The market looks as if it is running into a bit of noise currently, but eventually I think that we could be looking at a move towards the ¥111 level, if we can stay out of trouble, or at the very least stay out of an escalation of trade tariffs, I think that this pair will probably continue to favor the upside overall. However, I think breaking above the ¥111 level would be a bit difficult, so at this point I think we are looking at consolidation with the overall attitude of trying to go higher. I look at the ¥109.75 level as support, especially after the impulsive candle that happened during the early European session.
I believe that the ¥109.75 level will be supportive, but if we did break down below there I think there’s even more support near the ¥109.50 level. At this point, I expect a lot of noise, so I would be very quick to take profits when I find them. However, using some type of range bound system is probably going to be the best way to play this market, and I would not expect some type of massive move in the short term as there are a lot of concerns, yet I believe that at the same time there is a certain amount of optimism. Beyond that, we also have the interest rate differential which does favor the US dollar, which in a sense makes the market act as if it believes everything is okay, even when it doesn’t. In short, expect a lot of noise and back and forth trading.
USD/JPY Video 25.06.18
This article was originally posted on FX Empire
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