The Australian dollar dropped to open the Friday session against the Japanese yen but has since turned things around again.
AUD/JPY
The Australian dollar initially fell against the Japanese yen during the trading session on Friday to show signs of weakness as traders are still very on edge when it comes down to the Japanese yen. After all, the Bank of Japan had recently intervened, and so did the Americans to help support the yen, although that was probably more so aimed at the US dollar; but it does have a knock-on effect.
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The fall at the initial part of the session suggested that maybe there was some follow-through here, but since then we've seen a lot of buyers coming into the market to show signs of life. And now, it looks as if the 111.50 yen level is an area that's a short-term barrier. If we can break above there, then the market probably goes looking to the 50-day EMA.
Key Technical Levels and Central Bank Dynamics
On the other hand, if we were to fall from here, the 110 yen level looks to be support right along with the 200-day EMA sitting just below there.
The Australian dollar pays you to hold it against the Japanese yen at the end of every session, and it is worth noting that the longer-term move could really build up a lot of value over the longer term if we do, in fact, see a lot of choppiness over time and then an eventual grind higher.
There is, of course, going to be the concern about the overall noise coming out of the Bank of Japan and any games that they choose to play with the market, but overall, this is a market that will continue to be very noisy and very much in focus during the next several weeks as traders will try to determine whether or not central banks will get involved again or if this was just speed bumps for the uptrend like we had seen previously. I remain bullish. I recognize that you have to be very cautious and think longer-term at this point.
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