USD/JPY
The US dollar initially fell during the course of the day on Wednesday, but turn right back around at the 101 handle. By doing so and bouncing, we ended up forming a bit of a hammer. The hammer of course is a bullish sign and I believe that a break above the top of the hammer would be reason enough to start going long. I think the market could then reach towards the 103.50 level, and then possibly the 105 level above there. If we can break above there, then the market reaches towards the 107.50 level. At this point, it looks as if the pair is trying to find a bit of a turnaround when it comes to the longer-term trend, and I believe that the 100 level is still essentially the “line in the sand” when it comes to the Bank of Japan.
NZD/USD
The New Zealand dollar initially tried to rally during the course of the day on Wednesday, but tested the 0.75 level, and found quite a bit of resistance. Because of this, the market looks as if it is going to pull back and try to find buyers in order to break out above the top of that psychologically significant number. Once we get above there, market should continue to go much higher, as I think it would be a significant victory for the buyers. However, if we pullback and break down below the bottom of the range for the day on Wednesday, we very well could find yourselves dropping back towards the 0.73 level, where anticipate a lot of buyers would be waiting.
Anyway, I think the market will continue to be volatile regardless, and as a result it’s likely that the market will give plenty of opportunities going forward, but at this point in time I am essentially “buy only.”
