The US dollar started out the day soft on Tuesday, reaching down towards the ¥111 level where the buyers were found. There is also an uptrend line underneath that should offer support, so I think it’s only a matter time before we get some type of rally. This will be especially true if we get more of a “risk on” move, which I think is coming. Obviously, the pair has been sold off rather drastically recently, but I think it’s been overdone. At the very least I would anticipate some type of bounce.
The US dollar has taken a bit of a beating against the Japanese yen during the trading session on Tuesday, but I think it’s only a matter time before things turn around and rally again due to the uptrend line underneath than the psychological importance of the ¥111 region. Because of that, I think that the ¥111.50 level will be targeted initially, which was the most recent high. If we can break above there, then the market will more than likely go looking towards the ¥112 level, and then the ¥112.50 level. This is a very noisy market as you know, but it looks to me as if we are trying to turn things around after the recent selloff. We have rallied rather significantly over the last several months, so even though we’ve had a big move down over the last couple of days, it’s still a blip on the radar for longer-term traders.