USD/JPY
The US dollar has rallied significantly during trading on Friday, reaching towards the psychologically and structurally important ¥110 level. The level is an important psychological resistance barrier as well as structurally resistant, so it would not surprise me to see a bit of resistance appear. At the first signs of exhaustion I’m more than willing to sell, and I think that the failure at the ¥110 level is a signal to start selling again. If we do break above the tub of the resistance area, which I see as summer closer to ¥110.50, then we could go as high as ¥112. However, I think that the market will continue to be difficult to deal with and navigate, but we have recently broken down and sliced through a ton of support. After doing that, it shows that there is a lot of technical damage to this market. I believe that we will eventually test the ¥108 level.
AUD/USD
The Australian dollar initially tried to rally during the trading session on Friday, reaching towards the 0.7250 level. That’s an area that has been resistive more than once, and I think we are going to see this market pull back. We had gotten a bit too ahead of ourselves recently, and I think that this is a healthy pull back that as needed. However, I think there is plenty of support underneath though, especially near the 0.70 level underneath. I think that level is the beginning of major support extending down to the 0.68 handle, so I think it’s only a matter of time before the buyers jump back in based upon longer-term charts. The Australian dollar will of course continue to be driven by the US/China trade relations, which seemed as if they are warming a bit, but there are no concrete decisions yet.
