The US dollar has rallied a bit during the trading session on Thursday, dancing around the ¥110 level. The market I think can continue to go much higher, if we can break above the highs from the previous session. I believe that the market continues to be very choppy, and of course noisy to say the least as the pair continues to be very sensitive to geopolitical headlines and of course stock markets as they tend to be a reaction to geopolitical situations as well. There is a high correlation between the USD/JPY pair and the S&P 500. If the stock markets rally, then I believe that the USD/JPY pair should continue to go higher.
I think that if we do pull back, it’s likely that there is plenty of support near the ¥109.75 level, and most certainly below there at the ¥109 level. I believe that the market is trying to break out as fears of the trade wars are starting to wane a bit. I think that short-term pullbacks will continue to be looked at as value the people are willing to take advantage of, and of course with the interest rates rallying the way they have in the United States and of course the Federal Reserve raising interest rates several times over the next couple of years, it’s very likely that this pair will continue to find buyers.