USD/JPY
The USD/JPY pair broke higher during the day on Wednesday, as the 112.50 level was broken yet again. In fact, we reach all the way to the 114 level. This is a very bullish market, but I think it is a bit overbought at this point so I am very cautious about going long. I certainly wouldn’t sell this market though, even though I expect this market to pullback rather significantly. Quite frankly, I feel that any pullback at this point in time should be thought of as value, and necessary. This is a market that continues to see support at the 110 level, and I would love to see it test that area again. The US dollar certainly can’t be sold against most currencies, least of which the Japanese yen.
AUD/USD
The Australian dollar broke down during the day, slicing through the 0.75 level, the bottom of the hammer from the session on Tuesday, and of course showing signs of exhaustion near the 0.75 handle. In other words, this is a market that should continue to drop from here and reach towards the 0.73 level. Once we break down below there, we will go reaching towards the 0.70 level underneath. Ultimately, if you in mind the gold markets are highly influential when it comes to the Australian dollar see you will have to pay attention to them as well, but I think that the writing is on the wall, and that we should continue to go lower. This is an extraordinarily bearish candle and it broke through the bottom of a hammer that has now flipped over to become a “hanging man”, and that of course is one of the more bearish signals that you can get as far as candlesticks are concerned. Going forward, I believe that the US dollar will continue to strengthen overall.
