USD/JPY
The USD/JPY pair initially fell on Tuesday, but found enough support below to push the market back above the 1.1850 level at one point during the day. Ultimately though, the one thing that I do get out of this chart is that we will more than likely have support below so I am willing to buy pullbacks going forward. I think that a break above the 3 previous candles would of course be very bullish sign as well.
I don’t really have an interest in selling this market, I think that there is more than enough noise below to keep the market somewhat supported and with that it’s probably only a matter of time before buyers reenter as it would represent value in the US dollar. Keep in mind that the Federal Reserve is releasing the FOMC Statement today, so that could cause a bit of volatility.
AUD/USD
The Australian dollar ended up finding quite a bit of support during the day on Tuesday as the 0.69 level offered quite a bit of buying pressure. Because of this, we did up crashing back into the 0.70 level, an area that we fell from during the previous session. This is an interesting area for me, mainly because the 0.70 level is a large, round, and psychologically significant number, and of course the 38.2% Fibonacci retracement ratio is just above. We formed a shooting star previously, and that normally means quite a bit of resistance as well.
I think that any signs of exhaustion could be a selling opportunity at this point, and although we have had a significant bounce, I would be a bit hesitant to buy this market at this point. As a general rule, I feel much more comfortable buying above the 50% Fibonacci retracement level, and even better, the 61.8% level. Beyond that, we also have the previous uptrend line that could be resistive, so at this point in time I think it might be best to either sell or sit on the sidelines.
