USD/JPY and AUD/USD Forecast - 6 October 2016

USD/JPY

The US dollar initially fell during the day on Wednesday, but found buyers yet again against the Japanese yen. We have broken above the 103 level during the day, and as a result I feel that the market will continue to go much higher and perhaps reach towards the 105 level. I think the pullbacks will offer buying opportunities going forward, on signs of support. The Bank of Japan continues to work against the value of the Japanese yen overall, and I feel that if we did break down significantly we would more than likely find the Bank of Japan either intervening, or perhaps extending quantitative easing or even at the very least jawboning down the value of the Yen itself. Also, we have the recent remarks coming out of the Federal Reserve that perhaps the interest-rate level in the United States is too low, so this point in time you would have to think that perhaps we are trying to change the trend overall.

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AUD/USD

The Australian dollar went back and forth during the day on Wednesday, hovering around the 0.7625 levels. Ultimately, it looks as if the markets are continuing to go back and forth in what has been a rather reliable consolidation area over the last several sessions. Because of this, I don’t necessarily have any interest in buying or selling the Australian dollar at this moment in time, but I do recognize that we pullback from here, a very real possibility, it’s very likely that the market will find buyers below at the 0.75 handle.

Ultimately, this is a market that will continue to show quite a bit of volatility, and I find it particularly interesting that the gold markets have been so be enough recently, while the Australian dollar just simply has been hanging about. With this being the case, you could make an argument for longer-term strength, but right now I just don’t feel that trading this market is the right thing to do.

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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.