USD/JPY
The US dollar initially rallied during the session on Friday, but found enough resistance at the 114.50 level. This is an area that starts to see a significant amount of resistance, extending to the 115 handle. Ultimately, I think that it’s not until we break above the 115 handle that the market can continue to go higher for any significant amount of time, and therefore it’s likely that we will roll over from here. If we roll over from here, I think that the 113 level will offer support, and then eventually the 112 level. It’s not until we break down below the 112 level that I would be comfortable selling, but even then, it would only be a move for a couple of handles at best. I believe that the 108-level underneath is massively supportive.
AUD/USD
The Australian dollar has been absolutely pummeled over the last several sessions, as gold has been also. I believe that the 61.8% Fibonacci retracement level is trying to offer support though, and the fact that we formed a hammer for the trading session on Friday is a good sign. However, I also see a massive amount of resistance between the 0.7750 level and the 0.78 handle, so I suspect that a rally from here will be a short-term opportunity at best. I am much more interested in seeing what happens on the purple rectangle that I have marked on the chart, as it gives me an idea as to whether we can continue to rally, or if the downtrend will accelerate to the downside. Alternately, if we break down below the hammer from the Friday session, that would be a very negative sign, and should send this market down to the 0.7325 region. Pay attention to gold, it can give you an idea as to where we are going.
