USD/JPY
The US dollar did very little against the Japanese yen on Thursday, but interestingly enough found a lot of support at the 113 handle. I think that this area should be supportive, but the “floor” in this market is 112. Because of this, even if we break down from the bottom of the candle, I think that there is still more support to be found. Longer-term I am still very bullish of the spirit, and believe that we will eventually build up enough momentum to break above the 115 handle, and then go looking for the 118.50 level. The Federal Reserve is going to continue to raise interest rates, while the Bank of Japan will do nothing but quantitative easing going forward. Eventually, currency traders will trade in that manner.
AUD/USD
The Australian dollar fell slightly against the US dollar during the Thursday session, as the 0.77 level offered resistance. However, I think it’s only a matter of time before the buyers come back, and therefore I’m not interested in shorting this market. In fact, I believe that the market will break above the 0.7750 level, and continue towards the 0.80 level above, as it is a historically significant level. Pay attention to gold, it obviously has an effect on this market and if it can rally, I think the Australian dollar will follow suit.
More than likely we will continue to see choppy conditions until we can make the break out, but I look at pullbacks as potential buying opportunities now that we have had such an impulsive move to the upside during the Thursday session. I think there is a significant amount of support at the 0.76 level, and most certainly even more at the 0.75 handle. By being patient and waiting for supportive action or a bounce, you should realize profits.
