USD/JPY
The US dollar bounced from the 108.50 level during the trading session on Wednesday, which is an area that we have seen buyers come back into the market several times. The 115 level above is resistance as well, as the consolidation has been reasonably reliable over the last 2 years. If we were to break down below the 108.50 level, the market should then go down to the 105 handle. Alternately, if we bounce from here significantly, we will test the 111 level, and then break towards the 114.50 level after that. Ultimately, I believe this will come down to either expectations out of the Federal Reserve, which are very dovish, or perhaps a “risk on” attitude in the markets. Expect a lot of volatility, but we have very clearly defined borders.
AUD/USD
The Australian dollar went back and forth during Wednesday trading, and the 0.80 level has offered enough resistance to keep the market underneath, but it’s obvious that we are trying to break out to the upside. If we can close significantly above the 0.0 level, then I think the buyers will come into the market and try to push higher. This is an area that is important on longer-term charts going back decades, so this could be a sign of things to come. Pay attention to gold, if it starts to rally significantly, it’s likely that we will break out. Otherwise, we could pull back from the current level to find the 0.79 level to be supportive. There is a lot of choppiness and volatility, but I think over time we will find directionality soon. In the meantime, the very patient with your trading decisions, as a breakout to the upside could lead to the parity level, giving you plenty of time to get involved.
