Potential signal
- I am a buyer again if we drop close to the 155.50 level, with a stop loss at the 154.50 level. I am aiming for the 159 level eventually.
The US dollar has rallied a little bit during the early hours here on Thursday but gave back some of the gains on the 158 yen level. The 158 yen level, of course, is an area that I think continues to be important as it had previously been resistance. Ultimately, though, this is a market that continues to see a little bit of an overextension. I do think at this point in time, if we pull back from here, it is likely that buyers will try to find some type of value.
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Entry Point on a Pullback
I would be particularly interested in the 155.50 yen level, as it is an area that we launched from, and there should be a lot of demand. Below there, we have the 154 yen level followed by the 153 yen level. Ultimately, the interest rate differential continues to favor the US dollar, and I think that continues to be the case for quite some time. Ultimately, I just do not see a scenario where things change rapidly, and the fact that you get paid to hang on to this position at the end of every day certainly helps as well.
If we could clear the 159 yen level, this market could really start to take off, but I think we are a little overdone at this point. I am looking for some value. I went ahead and closed my long position for the day. Not because I think this is a bearish market, just because I think we pull back, we try to find a little bit of support, and then we continue the overall uptrend. Longer term, I do not really know where we go, but you could make an argument for 162 yen before it is all said and done.
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