USD/JPY
The US dollar rallied a bit during the trading session on Friday, bouncing from extreme lows. The 105.50 level has offered a little bit of support, but I think that we will more than likely find sellers relatively soon. I think that the 107.50 level above is resistance, as it was previous support, as the markets will come into market memory. If we were to break above that level, then we reenter the previous consolidation zone, and perhaps reach towards the 110 level. All things being equal, I suspect that rallies will be sold though, as the market has broken down below major support. I think that the 105 level makes a reasonable target at this point, especially considering that the US dollar itself seems to be struggling.
AUD/USD
The Australian dollar has had a wild ride during the trading session, initially rallying, but then falling back towards the 0.79 level in late trading. That’s an area that should be supportive based upon previous action, so it is probably only a matter of time before the buyers get involved, especially if gold starts to rally. The US dollar has been struggling in general, so I think that it’s only a matter of time before the market turns around and continues to rally. The 0.80 level is a massive resistance barrier, and I think it extends to the 0.81 level. The market breaking above there would be a “buy-and-hold” situation. Ultimately, if we do break down below the 0.79 level, I think there’s plenty of support closer to the 0.78 level as well, so I think it is easier to buy this market in selling, but the question now is simply a matter of waiting for a bit of a bounce to get involved.
