USD/JPY
The US dollar has fallen against the Japanese yen during the trading session on Tuesday but continues to find support below at the ¥111 level, after we formed a hammer during the Monday session. I believe that the demand is going to start picking up in this area and offer an opportunity to pick up the US dollar “on the cheap” against the Japanese yen. I believe that the market will recovering go towards the ¥113 level above, but it’s going take a bit of time to get there. Overall, the market will more than likely find a lot of noise in the process as we had seen so much selling, but clearly there is a lot of support underneath. Beyond the level, you have the 50 EMA Crossing the 200 EMA, which is a longer-term “buy-and-hold” signal for some traders.
AUD/USD
The Australian dollar has rallied a bit during the day, as we continue to bounce around the 0.73 level, reaching above the 0.74 level. I believe that the market will eventually try to break out to the upside, but we need to see the Aussie clear the 0.75 level, and at this point I don’t think it’s can happen in the short term. Because of this, I think that you should be looking for short-term pullbacks to take advantage of value, as the weekly chart had featured several hammers, which I think is showing a nice base. Ultimately, if we break down below the 0.73 level, that would be a very negative sign, perhaps sending this market to much lower levels. If that happens, I think we could go as low as the 0.70 level underneath. If we can break out to the upside, then I think the market goes to the 0.77 level.
