US dollar goes sideways against Japanese yen on Monday

The US dollar has gone sideways during most of the session on Monday, at least against the Japanese yen. We had been very bullish of the last couple of days, and of course formed a hammer on the weekly chart. We can break above the ¥110 level, the market is more than likely ready to go much higher, perhaps reaching towards the 112.50 young level given enough time. Short-term pullbacks should be buying opportunities, once we break above the vital ¥110 level. Until then, I would be a bit hesitant to put a lot of money to work. If we fall from here, I wouldn’t be quick to short this market, as there seems to be a ton of support underneath.

I think that the market will continue to be very sensitive to talks about trade, and the fears of course that the United States could start some type of trade war. If the markets have to worry about a trade war, that is going to put a bit of a drag on the market, as the US dollar continues to struggle overall. I think short-term pullbacks should be buying opportunities, at least in the meantime. I would be cautious until we break above the previously mentioned ¥110 level, and I don’t think that the move is going to be easy. Remember that this pair tends to move with risk appetite, so pay attention to the stock markets. If they rally, typically that will drive this one higher, especially the S&P 500.