US dollar shows obvious struggles during the week against the Japanese yen

The US dollar rallied significantly against the Japanese yen during the week, touching the ¥110 level again, but just as we had seen the previous week we ended up falling from there. By forming this shooting star for the 2nd consecutive week, it suggests that we are due for a pullback. When I look around the Forex world, it appears that we are going to continue to see a bit of trouble in the US dollar, perhaps in reaction to being in an overbought condition. This can be seen in the EUR/USD, GBP/USD, AUD/USD, and USD/JPY markets.

I believe that the market is simply giving the greenback positivity arrest, I don’t think that something has changed longer term. I believe that if we can break above the top of the ¥110 level, that sends this market much higher, perhaps reaching towards the 112.50 level. Otherwise, if we pull back from here I think that we will find plenty of support near the ¥107.50 level. In general, I believe that the uptrend line will hold below there as well, so I think for the longer-term trader it’s a question of either picking up value or buying the breakout above ¥110 above. The market will favor short-term selling, but I believe in the longer-term uptrend.