The US dollar initially pulled back against the Japanese yen on Thursday but rallied towards the ¥110.50 level during the day. I have a couple of trendlines drawn on the chart, and it seems as if we are currently stock between these two trendlines, and therefore I think that we continue to see a lot of noise. That makes a lot of sense, because quite frankly there are a lot of headline risk out there, involving trade tariffs and trade wars. All things being equal though, if we can get that to calm down, I believe this pair goes higher as we should continue to look at higher interest rates coming out of the United States while the Japanese central bank isn’t anywhere near normalizing monetary policy. If we can break above the ¥111 level, I think this market can go higher.
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