USD/JPY
The USD/JPY pair rallied on Wednesday, but turned around for a slightly negative candle. Currently, I feel that the market pulling back will only offer value to most traders, and thus is likely that a supportive candle will appear and offer value that traders will take advantage of. The 115 level underneath should be a bit of a “floor” in this pair, and this massive uptrend. The Japanese gin continues to show signs of weakness against most currencies in the world, and at the same time the US dollar is probably the strongest currency in the world. With a multitude of interest rate hikes coming out the United States, it will make sense this pair will continue to go higher.
AUD/USD
The Australian dollar went back and forth on Wednesday but ultimately ended up forming a bit of a shooting star. Ultimately, I think that if we breakdown below the shooting star, the market should go lower, perhaps reaching towards the 0.70 level which of course has been my longer-term target for some time. Rally should continue to see sellers above, and exhaustive candles are reason enough to start selling as it represents an opportunity to pick up value in the US dollar. With the Federal Reserve looking to raise interest rate hikes going forward, it makes quite a bit of sense that the US dollar strengthens.
Gold markets continue to look very soft, and that of course works against the value of the Australian dollar overall. I think that the 0.73 level above is massively resistive as it was the scene of a nice bounce previously, and with that a rally should only invite more sellers to take advantage of what has been a very obvious negative move. At this point, I believe that it’s not until we break above the 0.75 level or form some type of supportive candle on the weekly chart that buying is feasible.
