USD/JPY
The US dollar has gone back and forth against the Japanese yen during trading on Wednesday, as we have tested a major downtrend line on the large symmetrical triangle that I have been paying so much attention to. This is a market that I think continues to be very noisy, because quite frankly we don’t know what the outcome of the US/China trade tariffs will be, other than that they are probably going to be expanded. However, at the first signs of tensions easing a bit, it’s more than likely this market will go much higher. I think at this point, it’s obviously the downtrend line that is technically causing the issue, if we can clear the ¥112.50 level, the market is likely to continue grinding higher. However, don’t be surprised if there is a short-term pullback as we need to build up momentum. I would anticipate seeing buyers near the ¥111.50 level, and that of course at the ¥111 level.
AUD/USD
The Australian dollar has rallied again during the day on Wednesday, breaking through some relatively difficult resistance at the 0.7250 line. Perhaps it is the idea that the Chinese are starting to soften their stance a bit, or maybe it’s just a simple reflexive bounce after a major selloff, but it looks as if we will probably go towards the 0.7350 level where I anticipate seeing a lot of resistance. Regardless of this nice bounce that we have seen, we are still very much in a downtrend and that hasn’t changed. I see a lot of noise above at the 0.7350 level, so quite frankly I think the easiest play is the wait for the market to get to that area and start selling. This is because it’s going take a lot of momentum to break through the noise just above.
