Potential signal:
- On a daily close above 151, I am a buyer, with a stop loss at the 149.50 level.
- I am aiming for a move to the 153.50 level.
The US dollar has rallied significantly during the trading session on Thursday as we continue to slam into the 150 yen level. At this point in time, I think you need to keep an eye on this market to see whether or not the market can continue higher because if it can break above the crucial 151 yen level, then I think you’ve got a real shot at the US dollar taking off to the upside again.
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Remember, over the last couple of days, I suggested that perhaps we were in the midst of trying to bottom. And the session on Thursday really looked like it was going to be a continuation of that overall attitude, and it has been the question now is, velocity.
On a Move Higher
Breaking above the 151 yen level, I think, shows that we have. On the other hand, if we were to break down below the 148.50 yen level, then you’ve got a shot that the US dollar drops all the way down to the 145 yen level. In general, this is a market that will continue to move with interest rate differentials. It is probably worth noting that during the trading Thursday we had received preliminary GDP numbers out of the United States that were right in line with expected so the Federal Reserve is likely to sit very still at the moment and if that’s going to end up being the case then I think you’ve got to look at this through the prism of a market that is still paying you to sit on the greenback. I think you have to recognize that and understand that a certain number of traders are going to be out there willing to stay long. Right now, though, it looks like we are still in that process of trying to form a bottom, so keep an eye on that.
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