USD/JPY
The USD/JPY pair chop around during the Friday session as we continue to bang around the 115 level. This is an area that should be supportive, because it had been previous resistance. If we can break above the top of the candle for the session on Friday, I feel that the market will then reach towards the 118 handle. We are in a longer-term uptrend so this is the trade I prefer. However, we could break down from here and if we break below the bottom of the hammer I feel that the market will go looking for support at various levels underneath, including the 113 handle, the 111.50 handle, and perhaps even the 110 level. It is not until we break down below the 110 level that I would consider the uptrend in this pair over with.
AUD/USD
The Australian dollar was also choppy during the session on Friday as we slammed into the 0.75 level again. This is an area that’s been massively resistive recently, so it’s not a surprise that we struggle to get above there. At this point, I believe that if we can break above the Thursday candle the market will go higher, perhaps reaching all the way to the 0.7650 level. Alternately, break down below the bottom of the hammer for the session on Friday could be an opportunity to sell off and reach towards the 0.73 level.
The 0.73 level has been supportive in the past, so I don’t know if we drop down below there without a serious change in attitudes when it comes to not only the Australian dollar, but the gold markets. However, I do expect a pullback would be necessary in for markets to break out significantly to the upside, so I suspect that we are going to see a little bit of softening.
