USD/JPY
The USD/JPY pair had a slightly positive session on Friday as we continue to bang around the 104 level. I still believe we are trying to break out to the upside but there is a certain amount of bearish pressure at the 105 level as it is not only psychologically significant area, but it is an area that we have seen selling at previously. I think pullbacks will continue to offer value going forward, with the 103 level being significantly supportive overall. If we can break down below that level, the market looks very likely to pull back to the 101 handle, but at this point in time I stick to the idea of going long, because I know that the Bank of Japan will eventually do whatever it takes to turn this market around as it has historically done.
AUD/USD
The Australian dollar had a very strong showing on Friday, touching the 0.7650 level. We did pullback slightly though, but I think there’s more than enough support that we pull back the buyers will get involved sooner rather than later. If we get a supportive candle on a short-term chart, and I might be reason enough to go long, but you also have to keep in mind the gold markets tend to influence the Australian dollar as well, so pay attention to them. If they go higher, that would make sense that we would bounce. I think that the 0.75 level represents a significant “floor” at the moment, so I would not expect to be able to sell this market until we get well below that barrier.
Ultimately, I think that the 0.7750 level is massively resistive, and I don’t think that we will get above that anytime soon, and that is essentially the “ceiling” in this market going forward as the overall consolidation is essentially what I’m thinking.
