USD/JPY
The USD/JPY pair initially fell during the day on Wednesday, but we did reach towards the 100 level. I believe that the 100 level is eventually a bit of a “line in the sand” when it comes to the pair as the Bank of Japan will more than likely intervene below there. They have been quite vocal about their displeasure lately, and as a result it is likely that the markets are very well aware of that. It’s interesting that the area just above the 100 level offered enough resistance to turn things back around and form a hammer. I believe that if we break above the top of a hammer were going to trying to grind towards the 103.50 level, and then possibly the 105 level. I think that the pullbacks that we could see in the future are also buying opportunities. However, we recognize this will be a very volatile market.
AUD/USD
The AUD/USD pair initially fell during the course of the day on Wednesday, but turned right back around to rally and rose above the 0.75 level. With this, the market should continue to try to go higher but there is a shooting star from a couple of weeks ago than also causes quite a bit of resistance. With this, the market will more than likely be very volatile and difficult to deal with.
Part of the reason that the Australian dollar was strengthening of course is the fact that the gold markets were rallying. At this point in time, the market looks as if the buyers are going to try to push higher, but with all of the volatility I think it’s going to be easier to buy gold that will be Australian dollar. With this, I am staying out of this market but I do recognize that the area that we are in right now is very important for the longer term health or sickness of the Aussie dollar.
