USD/JPY
The US dollar rallied slightly against the Japanese yen during trading on Wednesday, as the 107 level proves itself to be supportive. I think there is resistance at the 108 level though, so it’s not until we break above there that I am comfortable buying this market. If we do break above that level, then we have the previous uptrend line to worry about, but I also think that we will more than likely go looking towards the 110 level anyway. I like the idea of buying short-term pullbacks based upon value, with the 105-level offering a lot of support. I believe that the market continues to be very noisy, but if we can stay out of a trade war and see signs of life economically, that should continue to be good for this market. If we did breakdown below the 105 level, then I think that the market unwinds to the 100 level.
NZD/USD
The New Zealand dollar fell during the trading session on Wednesday, reaching down towards the 0.73 level. That’s an area that was resistance in the past and it is the middle of the overall range, so we could see buyers coming back into the market rather quickly to push towards the 0.7450 level. I like buying the New Zealand dollar if we can stay out of a trade war, and of course I think that the market will rally around the kiwi dollar as it is so highly sensitive to Asian markets. If we do fall from here, the 0.7150 level underneath should be supportive. I believe that the way the market recovered a bit during the end of the session suggests that there are probably buyers coming back in.
