USD/JPY and AUD/USD Forecast
The US dollar pulled back a bit during thin trading on Thursday as we head into the Easter weekend. With Friday being a major bank holiday, I would not expect much in the way of movement. As we press the crucial ¥112.50 level, it’s obvious that there is a massive barrier of resistance just above. When zoomed out, you can look at the charts and recognize that there is a lot to chew through. However, if we were to break above the 112.25 level, we could start to really put damage on that resistance and go all the way to the ¥113.50 level. Short-term pullbacks should be supported down towards the ¥111.50 level, and that of course the ¥111 level underneath where the 50 and the 200 day EMA indicators are currently hanging about.
The Australian dollar has pulled back a bit during the trading session after initially trying to rally. We are currently sitting just above the 50 day EMA, so that of course should attract a certain amount of attention. I still believe that the Australian dollar is a currency that you should be buying on dips, and not selling as the market looks very likely well supported at the 0.70 level. As you can see back in early January, there was a massive hammer, which shows just where the longer-term support is. You can see on the monthly charts quite easily as well, so at this point I think that the Australian dollar is trying to form a bit of a bottoming pattern.
Keep in mind that this pair is going to be highly sensitive to what goes on in China, but we are starting to see signs of life in the Chinese economy, so that’s a very good looking factor as well. Buying on the dips should continue to work, as long as you are patient enough to wait for the market to rally.