USD/JPY
The US dollar has fallen a bit during the session on Tuesday, slamming into the 112 level. This is an area where I expect to see buyers though, and the fact that we bounced from just below that level isn’t much of a surprise. I would also point out that we have bounced off the 50% Fibonacci retracement level from the most recent move, so it makes sense that people would have been looking to buy in this area. If we can continue to move higher, perhaps above the 112.25 handle, I believe the market will go looking towards the 113 handle. If we break down below the lows of the session on Tuesday, I feel that the market will then go looking for the 111 level.
AUD/USD
The Australian dollar broke higher during the day on Tuesday, reaching towards the 0.7925 level. We close towards the top of the range, so that tells me that it’s a nice move the has real potential in it. Because of this, I am a buyer of pullbacks as long as we can stay above the 0.7750 level as they represent value. Pay attention to gold, it’s very likely that continue to go higher, the Australian dollar will continue to rally as well. It is not until we break down below the 0.7750 level that I would consider selling, and even then, I would have to evaluate the situation. I think the buyers will probably continue to reach towards the 0.0 level above, which is a large, round, psychologically significant number. It will probably take several attempts to break above the 0.0 level, but once it does, this market could really take off her a longer-term move. The US dollars on its back foot against most currencies, and the Aussie is suddenly finding itself in favor.
