US dollar breaks 107.50 during the week against the yen

The US dollar has initially pulled back a bit during the week against the Japanese yen, but then found enough bullish pressure to send the market above the 107.50 level. While this is an important level, when I drove down to the shorter-term charts, I recognize that there is a bit of a “zone” extending to the 108 level. Because of this, I think if we break above the 108 level we will more than likely go looking towards the 110 level.

In the meantime, I believe that short-term pullbacks could be buying opportunities if you wish to go to shorter time frames to take advantage of a better entry. I also recognize that over the last couple of weeks, we have found the major uptrend line to be supportive again, and that should be a good sign that the uptrend could return. That doesn’t mean that is going to be easy, because obviously this pair tends to be very risk sensitive, but if the headlines can stay somewhat calm or at least somewhat positive, then I think this pair goes higher.

If we pull back from here, I’m not interested in shorting this pair, least not until we break down below the major uptrend line, and then perhaps even the 105 level as it should be massive support as well. All things being equal, I suspect that the pair will go higher over the longer term.