US dollar rallied against Japanese yen in “risk on” move

The US dollar continues to be volatile in general, as the Japanese yen has a major resistance barrier ahead of it at the 107.50 level. I think that we will more than likely continue to find buyers on dips, and it now looks as if the 106.50 level is offering support. In general, this market should favor the upside, but that doesn’t mean that we won’t get the occasional shakeout. Once we break above the 107.50 level, it’s possible that we could go towards the 108 handle, which is the end of the resistance above, and should send this market looking towards the 110 level. I believe that the 110 level will be massive resistance, and I think that the overall attitude of this market will eventually prevail. However, headlines will continue to be a major issue, as we need to worry about a potential trade war. If things look to be cooling down between the Americans and Chinese, that should send this market higher. However, if we start to get negative headlines again, that will probably send this market lower.

Pay attention to the S&P 500, it tends to be a bit of a tertiary indicator for this market. Ultimately, it is an indication of risk appetite, and that should send this market in the same direction overall. It’s not necessarily the easiest trade to take, but I believe that the direction is starting to show itself, and that should continue to be the most important thing to pay attention to.