USD/JPY
The USD/JPY pair initially fell on Thursday, testing the area below the 112.50 level. There is a significant amount of support underneath their and with the jobs number coming out today it’s likely that a lot of traders would have been a bit concerned about hanging onto a short trade ahead of that announcement. If we can break above the top of the hammer, the market should then continue to go higher. Alternately, there is a significant amount of support down at the 111.50 level, so we need to break down below there to see this market dropped down to the 110 level. Given enough time, the choppiness should continue to prevail, but I think that the longer-term uptrend is still very healthy and should eventually reassert itself.
AUD/USD
The Australian dollar broke higher during the day on Thursday, clearing the 0.76 level, which was massively resistive. The market then reached towards the 0.77 handle, where we ran into a little bit of resistance. Because of this, the market looks as if it is one that we can serve buying every time a pullback, if we stay above the 0.75 handle which I see as the “floor” in this market. The market will continue to be volatile, and of course will be influenced by the gold markets. With the jobs number coming out today, expect quite a bit of choppiness. With this being the case, I like the idea of buying on pullbacks but I also recognize that it’s very difficult to hang onto a trade unless you have the wherewithal and perhaps even the experience to deal with this type of volatility.
If we breakdown below the 0.74 level underneath, then the market will fall apart. It is not until then that I’m comfortable selling, and would prefer to see the gold markets falling apart at the same time to build confidence in a short position.
