The US dollar pulled back significantly during the week, as the ¥114.50 level continues to offer major resistance. I think at this point, the uptrend line underneath should continue to offer buying pressure, and the ¥112 level course has been important more than once. I think we are either going to find buyers underneath, or we are going to continue to go sideways. I do recognize that the ¥115 level above is major, and if we were to break above that it would be a huge deal. I think at this point it’s a bit difficult to do so though, as the Japanese yen is considered to be a safety currency. Over the next couple of weeks, we will make many important decisions when it comes to the future of this market.
If we do break down below the ¥111.50 level, then I think the market could break down rather significantly. At that point, I would be looking at ¥110 as my next target. It’s a bit early or premature to call this as a potential “double top”, but it certainly has the potential of being so. If we break down below the support levels underneath, that would of course confirm it, and I think it would show that we are going to accelerate to the downside and a lot of risk appetite, not just this market. This market will continue to be very interesting to watch, but I think at this point it’s likely to be volatile to say the least.