USD/JPY and AUD/USD Forecast - 9 May 2016

USD/JPY

The USD/JPY pair initially fell during the course of the session on Friday, but turned back around and form a bit of a hammer. The hammer of course is a bullish candle and with that being the case, if we break above the top of the range from the Thursday session, I believe that we will try to break towards the 110 level given enough time. Ultimately, there is a lot of noise between here and there so no matter what happens, it’s going to be very choppy and difficult. However, it does look as if the buyers are more than likely going to jump into this market than the sellers, so I am much more comfortable going long. With that being said, the market will continue to be difficult to deal with.

USDJPY

AUD/USD

The AUD/USD pair initially fell during the course of the session on Friday, but turned back around to form a hammer. The hammer of course is a bullish sign but I still think that there is a significant amount of resistance above. After all, we broke down below the 0.74 level and that for my money was a significant support barrier. If we can break above the top of the hammer, I feel that the market will probably try to reach towards the 0.75 level that should find resistance there because it was previous support. At this point, I am ignoring this market on a break higher, and simply waiting to see whether or not we get the right exhaustive candle in order to start selling again. Alternately, we could break down below the bottom of the hammer for the session on Friday, and that would be reason enough for me to start selling as well.

The Australian dollar of course is paying for the Reserve Bank of Australia cutting interest rates the other day. I think because of this the Aussie dollar will continue to be on the soft side.

AUDUSD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.