USD/JPY
The US dollar pulled back initially during the trading session on Friday, but then rallied towards the top of the Thursday range. Ultimately, I see a lot of resistance above, especially near the ¥109 level. I think that the US dollar will continue to suffer at the hands of the Federal Reserve, as it is looking a bit confused as to where we are going next in the interest rate world. Beyond that, if there is more concern out there globally, this pair will also drop as the Japanese yen is a safety currency. If we do break above the ¥109 level, then it’s likely that we could go to the ¥110 level. However, the ¥109 el is the 50% Fibonacci retracement level, so it makes sense that we continue to find resistance above.
AUD/USD
The Australian dollar initially tried to rally during the trading session on Friday but found enough resistance at the 0.7250 level above two turn around and form a bit of a shooting star. The market also has to deal with the 200 day EMA just above, so it looks very likely that we are going to roll over from here. If we do, it’s likely that we could go as low as 0.71, followed by the 0.70 level after that. Ultimately, the Australian dollar is going to be highly levered to what’s going on between the United States and China, which at least are making some type of progress. Beyond that, if we can break above the 200 day EMA it’s a strong technical sign that we should continue to go higher. I believe that this market should continue to show lots of volatility regardless of which direction we go.
