USD/JPY and AUD/USD Forecast - 23 February 2018

USD/JPY

The US dollar initially tried to rally on Thursday but found the area above the 107.50 level to be a bit too rich for the market. I think that if the market break down below the bottom of the candle stick on the Wednesday session is a rather negative sign, but I would also point out that we are starting to see support at the 50% Fibonacci retracement level on short-term charts. In other words, I’m a bit wishy-washy when it comes to this pair right now. I think the easiest trade to take would be if we can break above the highs at the 108 handle, which would show a “higher high” in the market, a classic buy signal. A breakdown below the 106.50 level, we would break down below the 61.8% Fibonacci retracement level, and more than likely reach down to the bottom of the move near the 105.50 level.

USDJPY

AUD/USD

The Australian dollar rallied during the day as the US dollar took a bit of a hit. This makes sense as the gold markets turned around to rally as well, but when I look at the shirt I recognize that you can also make an argument for a bit of a psychological bounce from the 0.78 level. Because of that, I believe that the market is looking to rally towards the 0.79 level, and then eventually the 0.80 level. On the whole, I do think that the market will continue to find buyers underneath, so I like buying pullbacks as they give us an opportunity to pick up a bit of value. I think that the market will continue to be very noisy, but ultimately there is an underlying argument to be made for US dollar weakness.

AUDUSD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.