US dollar rallied significantly during the trading session on Wednesday against yen

The US dollar has rallied significantly during the trading session on Thursday, reaching towards the ¥110 region, an area that is massive resistance. If we were to break above there, the market is likely to go looking towards the ¥112.50 level. The market will more than likely reach that level rather quickly if we do breakout to the upside, as it would be a significant turn of events. I believe that we do see the US dollar strength in over the course of the summer, and that will course be reflected over here. However, it will more than likely take several attempts to break out to the upside, but once it does it should be a bit like a “beach ball being held underwater”, as we would pop to the upside rather quickly.

Otherwise, the market will pull back towards the ¥109 level again, which is an area that has been supportive in the past. I believe that ultimately even if we did breakdown through here, there is a hard “floor” near the ¥107.50 level. There is a major uptrend line underneath there as well, but I think that the large amount of noise between the ¥105 level and the ¥107.50 level will continue to offer a nice barrier to protect buyers. If we can break higher, I think eventually we will clear the ¥112.50 level, but that would take another catalyst beyond simple US dollar strength.