USD/JPY
The USD/JPY pair fell at the open during the day on Wednesday, but found enough support at the 104 level to turn things back around and form a bit of a hammer. A break above the 105 level would be a very bullish sign, and as a result would be interested in going long but I recognize that it would be a fight all the way to the 106 level. Above there, I feel that the trend will have changed.
Keep in mind that the Bank of Japan of course is threatening to get involved, and ever since we have heard rumblings in the market, Bank of Japan intervention or at least stimulus, this pair has shot straight into the air. The 105 level is of course an area that has been resistive and supportive in the past, so having said that I believe that we very well could get a little bit more of a pullback. That pullback does not get me selling this pair until we break down below the 103 level, which I don’t think is going to happen.
NZD/USD
The NZD/USD pair went back and forth during the day on Wednesday as we continue to fight with the 0.73 handle. If we can break above the top of the range for the day on Wednesday, I would be a buyer of this market as it looks as if we are going to continue to the upside. At this point in time, the 0.75 level will more than likely be where we aim for, and with that being the case I think that although volatile, it is a fairly strong signal to go long. On the other hand, if we pullback from here, I believe that there is plenty of support at the 0.72 level, the 0.71 handle, and the “floor” in the market at the 0.70 level. At this point, the New Zealand dollar does look fairly strong in general, so therefore I am bullish.
