US dollar rallied against Japanese yen during hectic week
The US dollar has initially pulled back during the week but found enough bullish pressure to reach towards the top of the previous week highs, at the 108 handle. If we can clear that area, then we should go to the 110 handle. I think that overall, the market will probably continue to find buyers on dips, especially if we can continue to avoid a trade war between the United States and China and of course if the corporate earnings continue to be decent. I think that the overall attitude of this market is starting to show signs of strength again, so break above the 108 level should send this market looking for the 110 handle. Ultimately, I believe that is an area that will be important as well, but I think that the uptrend line holding at the 105 level is massive in its importance, and of course the market breaking down there would change everything. We have shown enough strength to convince me that short-term pullbacks will be buying opportunities, so therefore I don’t wish to short this market, least not until the uptrend line gets broken from a long-term standpoint. Short-term traders may be able to do so, but I think it’s easier to simply wait for buying opportunities as they appear.
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If we did break above the 110 handle, the market probably goes to the 113 handle. Ultimately, this is a market that continues to be noisy, but overall, I think we are starting to find some confidence.