US dollar volatile against Japanese yen during Nonfarm Payroll

The US dollar pulled back a bit during the trading session on Friday but found enough support near the 108.50 level to turn around and rally again. This has been a complete recapturing of the selling pressure that we had seen, so I think we are going to continue to try to get to the 110 level. However, the weekly candle looks a bit like a shooting star, and it shows just how resistive the 110 level is going to be. I think that the market will continue to be very noisy, but if we did break above the 110 handle, that would be an extraordinarily bullish sign and should send this market to the 112.50 level.

Alternately, if we break down below the 108.50 level, the market drops down to the 107.50 level. Market participants continue to be aware of interest rate expectations and the treasury markets, and that of course is the biggest drivers of this pair. Stock markets also have a massive effect on this pair, so they start to rally that could be reason enough for the market to go higher. Otherwise, I think that we could fall a bit to find support underneath. I don’t have any interest in shorting this market though, as I think eventually we will find buyers underneath.

It’s not until we break down below the 107.50 level that I would be comfortable selling this market, but even then I think there’s a lot of noise underneath. I believe that value hunters will continue to flock to this market, despite the fact that we have a negative weekly candle.