USD/JPY and AUD/USD Forecast

USD/JPY

The US dollar broke higher during the trading session on Wednesday, slicing through the resistance over the last couple of days, and clearing the 50 EMA. This is a market that looks as if it is trying to build up the necessary momentum to rally towards the ¥114.50 level, and attempt another break out. It’s not until we break above the ¥115 level that we are free to go much higher. In the short term, I think the buyers will continue to pick up this market on dips, especially considering that there is a nice uptrend line underneath, as well as the ¥112 level and the 200 day EMA. Overall, this is a market that has plenty of buyers underneath and with the Federal Reserve looking to raise rates, it makes sense that the United States dollar should continue to go much higher.

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AUD/USD

The Australian dollar has rallied slightly during the trading session on Wednesday, as we continue to hang about the 0.7250 level. This is an area that is essentially “fair value”, right in the middle between major support at the 0.70 level underneath, and the 0.75 level above. Beyond that, there is also the 200 day EMA just above current trading, so obviously a lot of longer-term technical traders will be paying attention to this. Overall, I believe that selling rallies will still continue to work in the Australian dollar as it is so sensitive to the situation in China. The Chinese economy has been struggling a bit, and of course the trade war between the US and China will continue to cause issues. I believe at this point, selling rallies still will be the best way to trade.

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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.