USD/JPY
The US dollar plummeted against the Japanese yen as a bid to safety came back into focus on Thursday. However, when you look at the longer-term charts, we are still very much in and uptrend and that has not changed. I believe that the market will probably try to find buyers underneath, as the 61.8% Fibonacci retracement level and of course the uptrend line have both held quite firmly against selling pressure. There are concerns around the world for various reasons, and that of course has been a bit of a nightmare when it comes to trading the Japanese yen. If we were to break down below the 61.8% Fibonacci retracement level, then I think that leads to a much bigger unwind. We are still making higher lows at this point, so that should be kept in the back of your mind.
AUD/USD
The Australian dollar tried to rally during the day on Thursday but gave back most of the gains in order to form a bit of a shooting star sitting right on top of the 0.71 handle. That could signal that we are ready to break down a bit further, and below the 0.71 level I think we are very likely to attempt to reach the lows again, if not break down. That would make sense, because the US dollar continues to attract capital flows, and of course we have a big push towards the treasury markets. Beyond that, the Australian dollar is highly levered to what goes on with the Chinese economy, which is most certainly suffering at this point due to the trade war standoff. At this point, I believe the Australian dollar continues to be a “sell on the rally” situation.