USD/JPY
The US dollar rallied a bit during the day on Monday, but continues to find resistance just above. The 115 level is a massive barrier, so I think between here and there you are going to see a lot of pushback. If we can break above the 115 level on a daily close, the market should continue to go even higher, perhaps reach towards the 118.70 level. In the meantime, I think that short-term pullbacks are likely, and they will more than likely offer opportunities to buy this pair at lower levels, with the likely support coming in at the 113 level to keep the uptrend intact. Once we break above the 115 level, I would be willing to add to an already long position as it should accelerate the upside in this market. The Bank of Japan is miles away from raising interest rates, while the Federal Reserve is likely to do so later this year.
AUD/USD
The Australian dollar did almost nothing during the day on Monday, as we continue to see a lot of volatility in a market that is going back and forth in a 20-point range overall. The 0.76 level seems to be a magnet for price, so I think we will probably continue to see buyers and sellers both jump into this market place with little in the way of conviction. The 0.7750 level above will be the target, but I recognize that it won’t be easy. If we can get gold to rally, it could help the Australian dollar, but right now it looks very likely that gold will continue to struggle in general, and that should continue to weigh upon the Australian dollar. Quite frankly, it’s difficult to imagine being involved in any of the so-called “Comm Dolls”, as both the Australian dollar in the New Zealand dollar look flat.
