USD/JPY
The US dollar rallied against the Japanese yen as we sliced through the 117 level on Wednesday. This was in reaction to Federal Reserve interest rate high expectations, as although the market anticipated the hike on Wednesday, we now know that the central bank is looking to hike several times next year. This should continue to favor the US dollar overall, and at this point pullbacks should be buying opportunities as the Bank of Japan is completely dovish at the moment and as a result I believe that this market will reach towards the 120 handle, probably sooner rather than later. However, I’m the first person to admit that this market is overbought, and we need to find some value on a pull back.
AUD/USD
The Australian dollar initially broke above the 0.75 level during the day and then fell apart as the Federal Reserve suggested there would be more interest rate hikes going forward. Because of this, there was a lot of bearish pressure on Golden that of course works against the value of the Australian dollar itself. The US dollar continues to be the strongest currency in the world overall, and that is not going to be any different in this particular currency pair. However, we did see a little bit of support at the 0.74 level so I think that this is the type of market that you will sell rallies as they come on short-term charts. I have no interest in buying the Australian dollar, because most of the global strength when it comes to currency and economic growth is going to be found in North America, and not in Asia which is what the Australian dollar represents to most traders. With this, I believe that this market will reach lower, perhaps reaching to the 0.73 level that had previously been the lows.
