USD/JPY
The USD/JPY pair broke higher during the course of the session on Tuesday, testing the 103 region. With that being the case, it’s likely that we will continue to see buyers enter this market but there is a significant amount of resistance above that could be a bit of a thorn in the side of buyers. I think the pullbacks at this point in time will continue to be supportive though, and supportive candles that form will be buying opportunities. I think that once we get above the 103 level, we will more than likely reach towards the 105 level. Once we get above there, it becomes more of a “buy-and-hold” type of situation. I think that the 100 level is still the “floor” in this market going forward as the Bank of Japan will intervene if we break down below there for a significant amount of time.
AUD/USD
The AUD/USD pair fell significantly during the course of the session on Tuesday, but we still have quite a bit of support below and extending all the way down to the 0.75 level to offer buying opportunities. I like the idea of buying this pair on dips on signs of support, but only if it somewhere closer to the 0.75 handle. At this point in time, I think that the market will continue to be very choppy and with that being the case it’s very difficult to imagine placing any serious money in this market.
One thing that’s worth noting is that the gold markets fell apart during the course of the day, but the Australian dollar only fell in a rather mild-mannered fashion. This is a market that is normally very highly correlated to the gold markets, so this of course shows just how disconnected this market is at the moment, so I have no qualms about sitting on the sidelines.
