US dollar fails at ¥110

The US dollar tested the vital ¥110 level during the trading session on Thursday but rolled over to reach towards the 109 level. I think that the market will find plenty of support in this area, but even if it doesn’t I think there’s even more support to be had at the ¥108 level underneath. This market should continue to see plenty of support over the longer term, but the jobs number of course will have a major influence on where we go next. If the jobs number is good, that should have people thinking higher interest rates in America are coming quicker rather than later, and that of course should put upward pressure on the dollar itself.

If we can break above the ¥110 level, then the market will go looking towards the ¥112.50 level, followed by the ¥115 level. I think this could be the beginning of the next “leg up” in this market, if the Bureau of Labor Statistics releases a number that is favorable. If they do not, we could drop down towards the ¥107.50 level which I think is massive support. In fact, if we were to break down below the ¥107.50 level, I think the market could unwind rather mildly. I don’t expect that to happen though, so I continue to look for a bounce to take advantage of. If we do clear the ¥110 level, I think it will then become a bit of a floor.