USD/JPY
The US dollar initially rallied on Wednesday against the Japanese yen, you can see that there has been a significant amount of noise between the 112 and the 112.50 level. By running into that, the market turned around to form a shooting star and it looks as if we are going to continue to consolidate in the immediate area. I think there is more of a short bias over the next couple of sessions, thereby allowing the market to build up a bit of momentum and perhaps volume to try and break higher. It’s not until we break above the 112.50 level that I’m comfortable buying though, so having said that I think it’s likely that the markets will be choppy but after the FOMC minutes, looks as if the market is going to be a little bit on the soft side in the short term.
AUD/USD
The Australian dollar initially fell on Wednesday, testing the 0.7450 level underneath, only to turn around and form a massive hammer. If we can break above the top of the shooting star from the Tuesday session, the market will continue to go higher. If we can do that, I would like to see that accompanied by the gold markets rallying, in order to become trouble hanging onto a position. In the meantime, the market should continue to see choppy noise, and I believe it’s only a matter of time before the market will have to make up its mind. Once it does, more than willing to follow, but right now I think it seems to be favoring an upside move in general. Ultimately, I believe that in the next couple of days we should have quite a bit more clarity. Until then, I believe that we have to wait for the market to tell us which direction to be.
