USD/JPY
The USD/JPY pair went back and forth during the course of the session on Friday, as the Nonfarm Payroll Numbers cause quite a bit of volatility as they typically do. With this being the case, we ended up with a fairly neutral candle but I am very interested in the fact that we are sitting just above the 100 level, which is an area that will attract a lot of attention by the Bank of Japan. With this being the case, I feel that the market will continue to be very careful in this area, as intervention is a very real possibility. However, it doesn’t mean that it’s going to happen immediately. The Bank of Japan will work upon its own timeframe, so it doesn’t mean that they are willing to jump in as soon as we hit the 99.99 level. However, it is only a matter of time before they get involved, and traders will of course be nervous about holding short positions. Because of this, I expect a bounce.
NZD/USD
The New Zealand dollar had a very good day as we initially fell but then turn right back around to break out to a fresh, new high. With this, the market has broken above the 0.73 level, which is a very bullish sign and the fact that we closed at the very top of the range only strengthens that. Any pullback at this point in time should find buyers below, and I believe that the New Zealand dollar will in fact continue to go higher.
A break above the top of the range is also reason enough to go long, and we have just recently broken above the top of the recent trading area, which means that we are picking up significant momentum. I think sooner or later the 0.75 level will be targeted, but it might take a while to get there.